Color Wonder markers really do color only on the special paper. It takes a few seconds for the color to appear on the paper, but that didn't seem to deter Ellie any. The color is not archival, so it fades with time, especially in direct sunlight.
If you have a toddler who is likely to make a mess while coloring, I recommend Color Wonder markers and a paper. The markers are regularly sized, so they are easy to hold and help kids get ready for coloring with "real" markers. The Color Wonder markers we bought came in a little mesh zipper pouch, so we folded up a sheet of color wonder paper and put it in the zipper pouch to take to restaurants with us. The paper tears along folds easily, so there's no need to pre-cut the paper into smaller sections.
These have been beneficial for us while we have worked on teaching Ellie the "rules" of coloring. Only color on the paper, not your skin, clothes, or the table; keep the markers and caps out of your mouth at all times; never throw markers or caps onto the floor; etc. She is learning more and more about proper marker etiquette, and we have been able to train her without being frustrated or fearful that she would ruin her clothes, the furniture, or the carpet with marker ink. We will definitely keep using the Color Wonder markers for a while until she is old enough to color with "real" markers responsibly.
When I don't have time to make a birthday gift, I have given Color Wonder markers or finger paints and paper (they also have Color Wonder coloring books) for 2nd birthday presents.
For more information on Color Wonder products, go to Crayola's website.