There's a hidden gem in Menlo Park, though it has been in existence since the late 1920s and lends it's name to an entire (and I might add very charming) neighborhood, well off the beaten path but literally a stone's throw from Stanford Shopping Center. It's the Allied Arts Guild, home to unique shops, artists' studios, beautiful gardens and a lovely cafe. Each of the 7 shops/studios that I visited yesterday (there are a few more but one or two were closed) only carries items that are handcrafted or otherwise created by artists, so you can find some really special items there.
The Portola Gallery represents local artists and is a great place to find that special painting of the hills around here, or you can meet an artist and commission a painting at their weekly Saturday open house. La Bottega has an interesting selection of handmade Italian objects, including some wonderful leather purses that I was drooling over. You can find beautiful sterling jewelry at David Bigazzi Studio, fashionistas will go crazy over his belts made in Italy of stingray skin (that's known as shagreen for those of us who care) with handcrafted sterling buckles...simply amazing. There is a seasonal Christmas shop as well as a potter, a florist and a wood refinishing shop (The Barn Woodshop), which I have used and highly recommend.
A visit to the Allied Arts Guild is a really special thing to do with kids and out-of-town visitors as it is so unexpected and beautiful. The buildings were built in a charming Spanish style and are loaded with architectural details, and fountains flow around the property. While there as always been a cafe at the Allied Arts Guild, the current cafe is under new (professional) management and serves from 10am to 4pm, which is a big change from the previous, all volunteer-run restaurant. I can't recommend a visit highly enough, especially at this time of year when we could all use a peaceful break from malls and city shopping gridlock.