I also found this one at Growing a Jeweled Rose, she really has some great ideas!
It actually looks like scrambled eggs here, I followed the recipe she listed which was baking soda, food coloring, and then add enough water to make it moldable. I also added the suggested salt to give it more of a grainy texture. She did warn against adding too much water, which I didn't think I had done while mixing it but as the kids played with it the water started to come out and it ended up a little soupy. Which actually didn't seem to bother either of them, Bea even said she liked it.
Since ours was a little wet it ended up making a huge mess. The good news though is that it wiped off the kids very easily and I left it outside to dry out some before cleaning up, which made it very easy and simple.
Oh, and Bea insisted on wearing her sun hat when we started playing with the "sand".