Many traditional crafts are associated with this holiday; here are links to four easy projects, courtesy of Azcentral.com:
And a couple more from Crafty Chica:
Suggestions on making your own ofrenda, or altar offering for Dia de los Muertos are available here. And a recipe for traditional pan de muerto (bread of the dead). Sublime Stitching offers a Dia de los Muertos motif. Lastly, you can't be thinking I'd leave knitters out, can you? There's a Day of the Dead Knitalong, inspired by the Summer '06 issue of Knit.1 and the dolls therein.
Want t0 learn more about DdlM? Go here. (Thanks to Patrick Murillo for the knitter calaca image).