My children got a small sculpy eraser kit as a gift. I really liked it. It works just like the sculpy polymer clay. You just make your shape and bake it. The end project is an eraser. Here is the website for sculpey and some project ideas for the clay. It was very easy that even my two year old could make one.
The pencil erasers we made by just forming the clay right on the pencil. We baked the clay right on the pencil. I hope you enjoy doing these as much as we did!