First though please know it isn't Mexican Independence day so learn about the origins of Cinco de Mayo: About.com, History.com, Wikipedia.com.
For decorating I always think of a string of chili lights, sombreros, making a chili pepper wreath, brightly colored Mexican blankets and a center piece of bright orange, purplish, hot pink and yellow zinnias, and dahlias. Such as this display from Martha Stewart. Or just make brightly colored tissue paper flowers.
How To Make A Tissue Paper Flower -- powered by ExpertVillage.com
More crafts for decorations:
Mexican folk art of paper-cutting - to make into banners
Mexican Flag Pinata or this one by Martha Stewart
Mexican Dancing Clothes Pin Dolls - which would be really cute on a table and if doing a party - use them as place cards - by attaching a little tag to the "hands". Or if you are having a buffet use them in the same way but to tell your guest what each dish is or just hold a menu.
Metal cut-outs and punched tin napkin rings
Paper Flowers by Martha Stewart - I like how they are round and could be hung
Crepe Paper Mexican Flag
Make a canvas rug/table covering/table runner to look like a Mexican blanket
First some that I really think look good that I want to make...
Chicken Enchiladas Verdes
Turkey Nachos - this is pretty much how I make my nachos most of the time even if I use seasoned ground beef/turkey or roasted chicken. Sometimes I substitute the black beans for refried or pinto just depending on what I have around or what sounds best
Chicken Enchiladas with Roasted Tomatillos
Margarita Cake by Betty Crocker
And then some links that have a good overview of Mexican recipes to celebrate Cinco de Mayo...
Food Network Cinco de Mayo Recipes
Food Network Salsa Recipes
Allrecipes.com Cinco de Mayo Recipe Collection
Food Network Margarita Recipes
Kraft Foods Cinco de Mayo Recipes
Epicurious Cinco de Mayo Complete Package Recipes
Taste of Home Cinco de Mayo Recipes
Mexican Recipes by Martha Stewart