My kids' eyes lit up when I suggested a coloring book t-shirt--the thought of coloring on things that they're not normally allowed to color on was thrilling!
Using fabric paint, I designed the shirt and the kids colored it in. (You could, of course, also let your child design his or her own shirt.) I think this would be a great homemade gift for a child. I may design a few for my nieces and include the uncolored shirt and markers in a gift bag. I know I would have loved to receive this as a child!
For this project you want the thick fabric paint, so you can draw with the bottle. This is a step for you or an older child to do. I just did a simple freehand drawing of butterflies and flowers.
Another idea if you are not comfortable doing freehand is to just place a coloring page under the t-shirt and trace your child's favorite character.
Either way you want to have a book or thick sheet of paper between the layers to prevent the paint from leaking through to the back side of the t-shirt. Let your drawing completely dry before it's time to color. (Next time I do this project I will do the drawing at night while the kids are sleeping and surprise them with their coloring project in the morning. They had no patience for the wait time and lots of paint touching was happening!)
The kids were so excited when it was fiiiiinally time to color on their t-shirt. We used fabric markers and my daughter spent most of an evening making sure each detail was perfect.