How about writing games and getting your kids to test them out on their Ninetendo DS or GameBoy? A few years back I got seriously back into writing small proof of concept games for the Ninetendo portable platforms (DS, GBA, etc) and found I could actually get up and going pretty quickly for under $200. I purchased the EZ-Flash II system for copying my code to a cartridge and viola, I could play my games! The “garage” type developer community for these machines is amazing. You can check out the GBA Devrs site for tons of information on getting started. If you want an extremely easy to use development IDE and compiler go and get the Ham Dev tools at GBA.org.
What I found interesting was how similar this platform is to the Commodore 64 and Amiga platforms with regards to development. It is definitely old style computing from a game programming point of view. You can easily do 2D sprites (movement and collision) and multi-level background scrolling with built in hardware functionality.