Yes, you can use plain old white bread to create gorgeous crafts that last! The addition of white glue is what makes it a durable dough. Here's a basic recipe to get you started with this type of crafting. :) (And talk about FRUGAL -- just buy whatever brand of white bread is the cheapest and you can create loads of goodies for just pennies.)
Bread Dough Clay
3 pieces of fresh white bread (crusts removed)
1/4 cup glue
Crumble the bread and use hands to mix in the glue. Kids love this part! Add a bit of water if needed after about 1-2 minutes of mixing. Breads vary so you may have to adjust the recipe for the bread you are using. Food coloring or paint works great to color the dough. Kids can make shapes or even beads for a necklace. Dries in about 24 hours.
I also just posted a FOOLPROOF Kool-Aid Play Dough Recipe for Kids over at: http://kitchencraftsnmore.blogspot.com - be sure to check it out. :) It's one recipe you'll use over and over and over again...