Synopsis: It's a plain, black cup. When you add hot water an image emerges.
Review: The cup is not quite as plain black as you wish for. The victim might start twigging something.
Video: Magic cup [57 secs, Google video]
Pictures: cold / hot (God jul means Merry Xmas in danish)
Availability: I bought it from PixDiscont for less than 20$ - Try it. I haven't located an american shop, but searching for "magic mug" photo hot cold or something like that on Google/Yahoo is bound to lead to somewhere nice.
Tips: Baffle them. If you give the cup as a gift fill it up with something (a bag of coffee beans, perchance?). That way less attention will be on the cup itself.
The Goatse cup was snatched from my hands before I got the time to do a video. I'm sorry.