Noah's favorite book, for as long as I can remember, was Eric Carle's The Very Hungry Caterpillar. So once it was time for his 2nd birthday, it was a natural party choice.
But rather than make it all about the ravished caterpillar, we focused on Eric Carle's bright colors and the iconic dots throughout the book:
I filled two tall vases with multi-colored gumballs to look like the book's dots.
I also used a large round hole-puncher to make multi-colored confetti out of tissue paper. (Tissue paper has a watercolor-like translucency that mimicked the book's dots.)
Then I made a cardboard circle template and hand-cut a bunch of multi-colored tissue paper circles, which I then ran through a sewing machine to make garland. I thought it might rip the delicate paper, but it worked like a charm. I also filled the ceiling with multi-colored helium balloon "dots" — without the balloon strings, of course.
As for the menu, we used the book as inspiration:
Deviled eggs on lettuce ("…A little egg lay on a leaf.")
Cheese platter with apples, pears, and grapes ("…the Caterpillar ate through one apple, two pears, and a slice of Swiss cheese.")
Chocolate-covered strawberries ("…on Thursday he ate through four strawberries.")
A big salad("…on Sunday he ate a nice green leaf and felt much better.")
We also served non-book related food (like sandwiches), but the book has endless options: pie, chocolate cake, sausage, lollipops, ice cream cones, apples, etc. etc. etc.
For the cake, my sister made a bunch of cupcakes assembled into a caterpillar shape, and she varied the frosting color to make it Eric-Carle-ish. You could also make personal chocolate cake cups (baked inside mason jars, perhaps?), with a gummy worm sticking out. Or serve some cherry pie and ice cream.
We also had a big craft table for the kids, with giant Very Hungry Caterpillar coloring pages that we found at a local craft store, pom-poms and glue to make their own caterpillars, and — of course — watercolor paints. It was a huge hit.