We have a lot of Melissa and Doug items and we're always generally very impressed with them. The cupcake set is great fun and our six year old wanted it so much that she bought it with her own money. To start off with, it's a high quality toy. They're basically wooden cupcakes with candles that velcro on top. The whole concept of the icing markers is fun and all the kids (friends included) enjoy "decorating" the cupcakes. The part you draw on is a sort of plastic lid that fits over the wooden cupcake and is supposed to look like icing. It even comes with a little baking tin (wooden) and an oven mitt. There are paper cupcake liners in fun patterns included that aren't going to last forever, but hey...they are paper. We've generally got liners in the pantry so that's not a huge deal.
The big flaw in this toy is that the wooden cupcakes are not finished in a type of paint that will allow you to wipe the dry erase marker off of them. Only the plastic "icing" can be erased. Admittedly if you look at the very fine print on the back of the box it reads "Markers are intended for wipe-off icing surfaces only. Do not use markers on other components." Realistically however, giving kids some dry erase markers and letting them go to town on pretend cupcakes, is going to result in the entire cupcake getting "decorated." In the scheme of things it doesn't really matter because my daughter loves them anyway, but it does keep me from giving this toy Melissa and Doug's usual high approval rating. If this is something that is going to upset you or your child, you'd be better off buying another of their products.