I am surprised I could not find a thread on this. What are some common or good souvenirs some of you have purchased or know of in Peru? I have read several times about the sweaters, but I doubt we would have enough luggage room to buy those for parents, sisters, brothers, etc.

If you have children to buy for they have delightful little finger puppets. They are really inexpensive but adorable. My son loves them.

My daughter brought me back a beautiful alpaca scarf in shades of blue and green -- I used it as scarf/shawl on trip to Africa, so it's now quite international! Have no idea of cost but surely less than a sweater

We bought alpaca scarves and hats for ourselves and relatives. Wish we had bought more, actually. Cusco has a lovely selection, as does the alpaca/llama farm outside of Cusco (sorry, don't remember the name but everyone there will know what you are talking about). These items are light and don't take up too much space. With this cold winter in NYC, we can confirm that the alpaca hats we bought really are warmer than just wool. I actually have looked for them here (wanted a new hat to go with my new coat), but can't find the alpaca hats at a good price. We also bought coasters/ hot dish holders made out of corn husks. We use them all the time and were surprised by just how much we loved them. There are quite a few places to buy these and help support the indigenous people while doing so (in sacred valley).
Just don't make the mistake we made... if you are having a hard time whether or not to buy something and it's not terribly expensive, just get it. Who knows when you'll go back and you can always give it as a gift if you change your mind.
While you are there, don't forget to eat Pizza in Cusco (crazy good) and crab stew at Mi Peru in Lima!!!

While in Peru last summer we bought the usual sweaters for $8US and hooded ones for $11US and alpaca scarves for $10US. I also got an embroidered purse in bright beautiful colors, a blowdart gun, and handmade pipes. We saw many embroidered backpacks as well. We bought two backpacks and loaded them with sweaters! I also got a small ceramic nativity set with a Peruvian Christ child. Throw in a CD or 2 of Peruvian music and you are set!

Man! I have to apologize. I had thought I had thanked everyone for their ideas in this post already but it appears I was wrong. Thanks! I have actually since been to Peru and back. I went with SEVERAL of your recommendations and it was pretty ridiculous how many options there are at the many markets. My wife and I definitely agree with you Junejuly...any question as whether to buy it, just do it. Everything was definitely cheap compared to the US, but on top of that, you can certainly tell everyone there needs the money more than us. At the very worst, you are making a worthy donation.
Thanks all!