There are two great products we use to label our kids and their stuff.
Labeling your kids (ID Bracelets)
It's the same kind of bracelet as the yellow lance Armstrong "live strong" bracelets. This company lets you order in quantities as low as 5, and they have a child's size. We got 5 for $25 including shipping. The writing is debossed into the bracelet, so it won't wear off. And they have a good variety of colors. http://www.reminderband.com/.
We got glow in the dark w/ black writing
"Mom cell 510-555-1212 Dad cell 510-555-1213"
Note, we don't put her name, just our cell phone numbers. This seemed safer and more useful in case she gets lost.
HB won't reliably keep a bracelet on her wrist, so we use a key ring to attach them to her clothes. A jacket zipper or a belt loop works great.
Labeling your kid's stuff:
HB's daycare requires us to label everything, including sippy cups. But even perminent marker wears off in the dishwasher. So, we use Applied Labels. They are strong (dishwasher/washer/dryer safe) labels. These things don't come off! A bit pricey, but worth it to not have to keep re-labeling everything all the time. http://www.appliedlabels.com/
Note: I do not have a relationship with these companies and don't receive any compensation for recommending them. I just think they are great products that I wanted to share with you.