DS picks his theme, and we work around it. For birthdays 2 & 3 (trains & construction, respectively) I Pinterested & put the room/food/etc together. I didn't go over-the-top, but I was pretty proud of it. For his 4th birthday, this year, he wanted a dinosaur theme...and our local Museum of Natural History took care of pretty much everything for us. Plus, the "pirate dinosaur" themed cake, generously made by our grocery store.

My kids pick the theme and then I go to Pinterest for ideas. I save all my party stuff so I sometimes try to convince the younger child to choose a theme for which I already have decorations.