Since gas is so high now, it seems that people are looking for activities, dealing with bored kids, and basically trying to keep from going crazy. Here are a few of my suggestions.
Look into some local churches for parties, cookouts, etc. This is usually free, and even if you dont belong to the church, or aren't religious, most people are still welcome.
Next, find your states local parks website. Browse to find the festivals of the parks nearest you. Ususally there is something going on once or twice a month, and they are usually free. This is more weather dependent then other activities.
Find some local attractions you may have never been too, and go visit them. Museums, battlefields, parks, anything new and cheap. It just takes some looking.
Go to the movies. Its relatively cheap entertainment, saves gas, and keeps the kids happy.
All in all, summer can be a headache for a lot of people, but with a little work, it makes it worthwhile.