We felted soap! We looked up a few online tutorials and had at it. Start with some good handmade soap, available on Etsy or often at a local crafty farmer's market. We chose Showertreatsoap on Etsy, because she makes the most delightful rose scented products. I buy the rose scented soap and laundry powder. In this case, she found a few odd sizes of some of her other delightful scents for me, because she knew the kids were going to try out some soap felting.
Get your supplies ready- handmade bar soap, wool roving, and old nylon stockings. You can cut the nylons up and knot them at one end to make a nylon stocking bag.
You need a few hands willing to get wet and sudsy. Bigger hands have an easier time with this than little hands do.
You need a basin of warm water for sudsing and some clean water nearby in case soap does get into eyes.
A responsible and cheerful adult should supervise, to make sure that soap doesn't get into eyes, mouths or noses.

Remind the kids that soap tastes horrible and that it stings the eyes. They shouldn't touch their face while they're working on the project.
Start wrapping the soap with wool roving. Try to wrap up the whole soap. If the kids are doing it, resist the urge to step in and do it right for them. Keep your hands off and let them do it, offering a few tips if necessary.
The kids might not do it perfectly. The wool wrap might be a little loose. You might end up with a few thin spots in the wool felt. Remember, it will be their soap, their project, and their feeling of accomplishment. You'll be surprised at how great they turn out (the soap and the kids.)
Take the wool wrapped soap and put it in the nylon stocking. You can hold the stocking open while the child puts it in.
Get the soap wet in warm water, as warm as is comfortable to a child's hand.
First they rub it around gently in their hands, working up to firmer and firmer rubbing. You can take the soap long enough to show them how to flip the soap around in their hands, but otherwise, keep your adult hands off. This will take awhile. Encourage them and keep them rubbing and rubbing and rubbing, using more and more consistent hand pressure. This is really good for them and the messy suds are fun.
You can check the progress after 10 or 15 minutes.

That bar needs a little more scrubbin' and rubbin'.
When they really can't stand to sit there and do it anymore, take the bars out and be done with it.
Lay them out in a sunny spot to dry.
Here they are, all dry and ready to send off as a gift or use in the bath.
Don't worry about the imperfections- thin spots or unevenly felted spots. They're beautiful just as they are. These are like nice little scrubbie mitts. When the soap is all gone and fully rinsed out, you can then use the leftover felt to make a pouch, or in some other project.
Kids like this project. It's messy, requires a little elbow grease, and results in a useful and attractive end product. It involves multiple textures; fluffy, wet, slippery, and coarse. It's also a bit magic, transforming soft fluffy wool into a coarse matted fabric. The kids get to enjoy their handiwork again every time they take a bath or shower.
Take care and Enjoy!