I've made custom photo mugs in the past for holiday gifts and they have always been really well received! Right now York Photo has a really nice offer, where you can design your own custom photo mug for only $1 when you use coupon code 1MUG at checkout! You will need to pay shipping which is $5.99 for the 1st mug and $1.99 for each additional mug after that.
I really like the collage style mugs, these are the type that I have made in the past. It's so fun for family & friends to be able to glance at some cute pictures while enjoying their morning coffee.
Please keep in mind that this often the case with these sorts of deals, that you must be a new York Photo customer in order to take advantage of this special offer.
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