In 2003, Maartje Steenkamp's graduation show design for an adjustable wooden highchair was included in "Your Choice," an exhibition by Droog Design at the Milan Furniture Fair.
The design and the adjusting mechanism are both very simple. As the kid grows taller, you saw the legs down (saw and sandpaper included), going from highchair to mediumchair to lowchair to just 'chair'.
Now, according to an interview in Icon Magazine, Droog has commercialized the highchair, and it'll be available soon for Ôø‡149, almost cheap enough that you won't wince when you start hacking.
See Droog Design's 2003 Milan exhibition, 'your choice' [designboom.com]
Droog Design official site [droogdesign.nl]
[7/06 update: the highchair's for sale for $195 at zmodern.com, in Denver.]