My friend Will Bunker turned me to the Scratch Web site and development environment. Scratch lets a child of any age build an interactive application - games, greeting cards, all kinds of stuff. Kids can also set up a social network account (specific to Scratch) and friend people and comment on games. One of my favorite features is that all of the projects can be downloaded so that you can modify them and learn from them.

Web site: http://scratch.mit.edu/

Getting started guide: http://info.scratch.mit.edu/Support/Get_Started