Hi Tracey, we're not there yet either - we have a 4yr old DD also. We decided a while ago to get a roll of the gold dollar coins to use. I wanted the Susan B Anthony ones, but they are not being minted anymore, so we'll just get president ones now I think. We're only going to leave one coin ($1) for each tooth and a little note. I figure the neat gold coin (which is rarely seen) will convey how special it is, and can fit in her piggy bank. I agree with the other poster who said that kids this age don't really understand money values anyways, so why go overboard?
You should do whatever you are comfortable with doing and don't worry about what her friends are getting. Its harsh, but true. It only gets worse from here, so better to start strong with the "it doesn't matter what others get, this is you" kinda thing. In middle/high school the parents of my friend who lived in the house across the stree from us paid her for her grades - she got $100 for every 'A' on her report card!! ($75 for Bs and $50 for Cs)-- man, I woulda been rich! = ) I was stupefied!
There will always be parents who make different decisions than you (everything from bedtimes to allowances to curfews when they are older), and you have to live with your kids thinking its not "fair" - better to start early to set expectations around what you think is right and then stick with it. = )
<off soapbox now> = )
Good luck!