Have the children draw a picture out of a can, and figure out with the other kids which side it goes on. For the older kids, you can have a scripture instead of a picture, and they have to match the reference to the item and the side of the fence. For instance, a reference to tobacco could be for both cigarettes and chew.

When something is placed on the right side, have the children explain why it's good for us, and when it lands on the wrong side, they can give their undrerstanding of why it's bad.  (You can correct any misconceptions as they come...)  Make sure that there are some that land on the fence (grey area) and have the children vote to choose which side it should be on.

The fence can also be the iron rod with mists of darkness on one side and the tree of life on the other (if you're going with the scripture theme).

It might be more memorable and easier for the children to associate actual photos of things they see every day with the Word of Wisdom.