I saw this post by the Young House Love bloggers on BabyCenter: an adorable idea for a 1st birthday party, though you certainly could do it other years too.
Personally, we prefer the super low-key first birthday party with family only. I think Michael would get a kick out of a Dr. Seuss party even at age 4! But some of the suggestions are a great idea no matter your theme. I especially liked the 'guest book' idea.