While small numbers of toys are fairly consistently pulled from shelves due to choking hazards, massive toy recalls in 2007 shed rather dramatic light on a different issue entirely: toxicity.
The biggest offenders in children's products in general are lead and phthalates. Both are known poisons that can have a more profound effect on children than on adults. Anything over trace amounts of lead has been banned in toys. Lead is a neurotoxin that can cause brain damage, kidney damage and an array of other ailments. Phthalates are a more controversial issue, but studies have indicated they could cause reproductive problems and early puberty, and six types of phthalates are banned or limited in children's products [source: MSNBC].
Even with new, stricter regulations in place since a system overhaul in 2008, the CPSC recalled well over a million toys for toxicity issues in 2009 [source: USPIRG]. The PIRG found a piece of toy jewelry that was 71 percent lead by weight, and two toys that violated phthalate levels that year [source: USPIRG]. So, as always, parents must be vigilant: Look for "nontoxic" labels on art supplies and painted toys (the standard "ASTM D-4236" on crayons and paints is a good sign, too); and avoid even the most well-intentioned older hand-me-downs, since a toy from 10 years ago may not meet current toxicity standards.
That's actually a good toy rule in general, despite its financial foolhardiness: "Thanks, but no, thanks" to the bag of toys from your great aunt. Safety standards have improved over the years, so when it comes to kids' toys, newer is probably better.
Details like age ranges and toxicity standards are important, but in the end, no parent can catch every safety violation, and no child will always play with a toy as the manufacturer intended. So the most effective safety measure is a pretty simple one: Always supervise playtime. It's the best way to know your kids' toys are safe.