The kid trailers work great if you can find one at a garage sale. Otherwise they are overpriced. Personally I think they are priced high just so parents feel more secure about tucking their tykes in 'em. I've been haunting yard sales all summer to find one, as a buddy wants to do a conversion for his gear.
Last year I wanted to hook up my Mag Hauler to my bike. The coolest and most inexpensive hitch design I was able to find was at this guy's now defunct site. Unfortunately, he lost his shop in katrina just before I ordered it...
If you look at his hitch it doesn't look like it would be that hard to replicate. Drill out some pipe or square tubing in a couple of places. Get some bungee cords, a cross bolt, and o-rings to set it on the seat post then you'd be good to go.
I'll try to get a version of the hitch done in the next couple of weeks. If I can figure out how to do it in the most cost effective way possible - I'll post up the results.
With any luck I'll be a towing fool come the season.
All this for a bowl of borscht.