I gave my niece clothes (mostly play clothes/casual outfits) and a special book with a note from me inside for her 1st birthday. At that age they don't really care and clothing is usually something they need. I know her parents were VERY appreciative. She already had way too many toys and frilly clothes.
For her second birthday I gave her toys because by then she was able to tell me exactly what she wanted! Anything with Maisy or Dora the Explorer.
If you still want to give a toy, I highly recommend the Leapfrog Leapstart Learning Table. It teaches numbers, colors, shapes, the alphabet. I love the singing and music. I've probably played with it more than my niece has! You can see a demo of it
here. It can lay flat on the floor for infants. As the baby gets older, you can put the legs on it so they can use it to pull themselves up when they start to walk.