In general, in building a home instrumentarium, look for the following categories of age-appropriate instruments:
1) Something to hit. The younger the child, the bigger hitting surface and the bigger thing to hit it with-large plastic storage containers are great. So are Remo Kids Drums, LP Kids drums, Yamaha kids drums, and other durable hand drums. I would not suggest getting a toy drum that isn't made by a percussion manufacturer-usually they break quickly.
2) Something to shake-Rattles, egg shakers, maracas, and other sound makers. You can make these from plastic or metal containers and something to fill them. Rice is good for very young children, because it won't hurt them if the container comes open and some is eaten. Commercial instruments are good, too-but check age testing for the under 3s especially.
3) Something to bring to the center-sandblocks, small cymbals, and zig-zag blocks are all good choices for this. Meeting at and crossing at the midline is an important skill. Zig-zag blocks aren't my favorite instrument sound-wide, but are a great instrument for toddlers (These are included in the Wiggles and Giggles Kindermusik home Kit) because they are one piece, with nothing to come off.
4) Something to blow-train whistles, kids harmonicas, and other noise makers help develop lung capacity and control. Recorders are a good choice as children get into the 5-7 yr old age range.
5) Something that plays pitches-Boomwhackers (tuned plastic tubes) are wonderful for this, a great way to burn off energy, and not terribly expensive. Handbells, resonator bars, a good bell set, or orff instruments are also great options-but can get a bit expensive.
6) Something with a keyboard. An inexpensive electronic keyboard with a good sound-it doesn't even need full-sized keys-is a good way for children to explore making music and move into playing melodies. A piano or full-sized keyboard is even better, if you have one, but I wouldn't buy one for an infant or toddler just yet!
7) Something with strings to strum-for children in the slightly older age ranges, ages 5+, a small guitar, ukelele, or dulcimer can allow a chance to explore a different type of music making. These work best if you are able to tune them (you can download apps for cell phones/iphones/home computers that turn it into a tuner, and then simply adjust the tuning pegs to bring the instrument into tune).
8) Earplugs for parents, so you can handle the experimentation phase!
All of these instruments, at home and in class, give children a chance to explore, to experiment, and to find out what they really like, what they don't like, and what they love musically. While many children can be successful on almost any instrument, when children are MOST successful is when they pick something that they love. And that comes from seeing, hearing, and trying out approximations. We do this in Kindermusik classes every week, but don't be afraid to bring it home!