I didn't think parachutes were effective below a certain altitude. Off-hand, the only possible solution that comes to mind would be something like the airbag system NASA's been using to land some of the Mars rovers (http://en.wikipedia.org/wiki/Mars_Exploration_Rover#Airbags). Anyone else got any ideas?

That seems sensible, but in my experience with RC planes, flying low can actually make avoiding crashes very difficult.