I gave my son a few blue plastic bottle caps and an empty icing container with a slit cut in the top. I asked him to put the bottle caps into the container. He did this at least 5 times and was having fun all the while. I helped him count the caps as he put them into the container to give him a little counting practice.
Then I decided to give him some red lids and a container with a red lid. I asked him to put the red caps into the red container and the blue caps into the blue container. He did this a few times before loosing interest. At 2 1/2 it seemed to be more fun just to put the bottle caps into the container than to actually sort them, but he did understand the concept.
This activity was free because all of the items used were destined for the recycle bin anyway. I will definitely try this activity again.