For Maker Faire Detroit 2011, I displayed a hack I made to a FurReal Friends Butterscotch Pony. My fellow LVL1 Hackers and I had taken control of the motor control system of the toy and added a flame thrower to it. It seemed to go over really well with the crowd, so I am putting up the information for anyone to make there own. It was a blast to make and I hope everyone has as much fun remaking it. Just remember that this project uses Fire and should only be built and operated by no less then 2 adults with appropriate experience in fire safety and proper fire safety equipment on hand.
Step 1: Get it before you hack it
At one time, Butterscotch and S'more ponies both sold for around $300, but they seem to be discontinued. I would never suggest someone pay this much for something new, just to make it better. Thankfully, there is a fairly steady stream of them showing up on Craigslist and second hand stores.
I purchased my first Butterscotch off of Craigslist for $20. I have since picked up a second one for $25 from a peddlers mall. I commonly see them listed for ~$100, but with a little negotiation and/or patience you should be able to pick one up for dirt cheap.