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Why are people giving infants toy phones and plastic things they can bash each other on the head with? Seriously. Our kids are pretty stripped down as personalities go and are closer to our primate roots than adults are. (Except at football and rugby games.) The first thing a small child does with a hard toy is try to bash some other kid's brains out with it. If there are no other kids, they go after the dog or cat or mummy's kneecaps. When the toy is not being bashed on someone or something, it is hard and unpleasant under the feet.
I don't recall stuffed animals being made with lead paint. Why not get those for Junior? Steiff, being up to date, has a wonderful stuffed Rottweiler, for those who love stylish dogs (http://tinyurl.com/2dyuck). Also, there are plain wood blocks
http://littlefolks.stores.yahoo.net/medounblwicr.html, which were a big hit in my house. (Good for bashing Fido with.) An ordinary baseball is still made with animal hide.
That's just the tip of the iceberg. There are also homemade toys, like two chopsticks and a Quaker Oats container, going on ebay to find a Raggedy Ann sewing pattern, getting the book on how to make sock puppets, and using some lumber and garden sand to make a sandbox...