An easy trick that kids can understand and that works with a blind-folded puppet: Spellbinder's "Color-Blind." You forced me to write it up with your post and Qua-Fiki twisted my arm because he wants to use it first.
Effect: Two sets of jumbo cards are displayed. Each set has six cards, each card has a large colored dot on it; Red, Yellow, Orange, Green, Blue or Purple. You hand a kid one set of the six color dots, your puppet looks over the other set of six color dot cards. The puppet, blindfolded or not, chooses one of the cards and sets the others aside. Now the kid freely picks one of the colors and sets the other cards aside (after being given the usual chance to change his mind, etc.). The kid holds up his card so the audience can see what color he finally chose. The puppet turns his card around and the colors match.
It will be added to The Wizards' Journal #18 if the editor approves, but since I'm the editor, it's a simple matter of bribing myself to include it.