I've found that verbal judo works very well - get down on their level, see where they're going and roll with it. When a little girl realizes "Hey, this person is someone who listens" you've made a friend for life

Do you know where I can find a unicorn? How about a pegasus instead? Winged horses are cool too.

If I find one, how do I get it to you? It won't fit through the phone...

Wait a minute, do you know how to take care of a unicorn?