Sting is a Hobbit sword. It wasn't designed as a Hobbit sword at all but forged by the Elves as a little dagger. When Bilbo Baggins found this dagger during his escapades in The Hobbit, it was just the right size as a sword for him because Hobbits are a lot smaller than Elves.
Bilbo passed the sword on to his younger cousin and adopted heir, Frodo Baggins, during The Fellowship of the Ring. So both Hobbits owned the sword which is why you sometimes see reference to Frodo's sword or Bilbo's sword - it is in fact one and the same.
United Cutlery have made a fantastic replica Sting sword from The Lord of the Rings movies. It is most certainly not a toy but a very good quality, heavy replica which is ideal for display purposes and wall mounting. It could cause damage if used for play fighting, for which it isn't intended.
I love the Smaug The Magnificent Stein which is a traditional stoneware beer mug. The artwork on this which shows the dragon, Smaug, from The Hobbit in all his glorious color is amazing.
You really need to look at the close ups of this image of the stein. It's a handcrafted and limited edition piece that also features a gold plated lid. You can drink out of it - but it really is a collector's piece for display.
A Hobbit gift that you can play with is this wonderful Smaug 1000 piece jigsaw puzzle. Tolkien fans will love making up this puzzle which is created with this intricate dragon illustration. It shows the proud Smaug with his amazing loot of treasure.
If you're looking for more Hobbit Gifts, you should also take a look at what eBay.com has to offer. There are some handy links below for you so you can quickly find the perfect present there.