My daughter loves plastic blocks and bricks, but I would like to get her some wooden blocks since they come in so many different shapes [ex: http://www.melissaanddoug.com/wood-block-set-small ]. Does anyone have any recommendations about which block set is better (and still affordable) ? Thanks! 
Great question! I saw these blocks at a Scottish festival in the US.
I cannot speak from experience because I have not used them in my home. But I think they are amazing, and beautiful, and I will definitely be purchasing them for my son in the future.
The creator of the blocks is very creative. For example, his business cards are small blocks of wood with the website printed on them. I love supporting small creative businesses like this one.
Good luck in your search!
I think the Melissa and Doug ones should be good and well-made if you are looking for a set of basic building blocks. Here are some more options to choose from, including block people, block vehicles, and block play stores to further extend play:
That being said, I did not purchase a block set for my daughter until recently. She goes to daycare so she had all the building blocks she could ever want to play with there. I was waiting for her to become old enough for these (meaning, past the block-throwing stage):
http://www.amazon.com/Shure-Deluxe-World-Fusion-Pieces/dp/B000YMAUD6
Yes, they are very expensive but she will be playing with these indefinitely. It comes with an 86-page educational book that teaches about the history of architecture in the different cultures, architectural terms, building ideas, models of famous buildings around the world, etc. I plan to use this not only to encourage her creativity, but also use it to supplement our lessons in history and geography. For example, when I am teaching her about China, I will help her build a replica of a Chinese pagoda and teach her about the symbolism of curved eaves and dragons in the Chinese culture, and so on and so forth. She has been playing with these blocks for at least an hour every single day since she got it last week (even forsaking her beloved Lego education sets for it). She now knows what a ziggurat is vs a p’ai lou vs a portico. :biggrin:
We have the wooden blocks by Ryans room (the colored ones). My son absolutely loves playing with them.
http://www.amazon.com/Ryans-Room-Wooden-Blocks-Natural/dp/B003Y9ZUHM