Arts on King, Toronto
Carries a fantastic selection of crafts by local artists. A little pricey, but you get what you pay for because it is all very good quality, one of a kind stuff.
Update: Sadly, last time I checked this shop appeared to have closed down. Will try to confirm next time I'm in the area.
What to buy: The jewellery and picture frames there are always nice. Lots of things to tickle your fancy.
Last time I stopped by they had a new line of clocks that I thought were pretty clever. They're called Crummy Clox and they are made from reclaimed toasters and things. I would have brought one home if it weren't for the $250 price tag.
What to pay: $10-$2000.