You could do the caterpillar saying the vowels (do them in grey) and the consonants in another color for your word wall...
You could (for a decoration) make a big teapot from paper and have a mouse popping out from inside the teapot... I hope this makes sense... It's the dormouse...
Decorate your door so it represents the rabbit hole, or the looking glass, where people have to go through to enter your classroom.
Hang up signs with 'this way', 'that way', 'up', 'down', etc. painted on them, like in Disney's Tulgey wood.
Decorate the walls with playing cards (normal size or really huge ones from cardboard), and the floor with a chessboard-like pattern. Scatter around some chess pieces.
Hang a branch to the ceiling with a Cheshire Cat (or just it's grin) in it.
Here's a link to some Alice in Wonderland stuff: http://www.amazon.com/s?url=search-a...Go.x=12&Go.y=9