Smalltalk with Squeak. It was invented with children in mind, it's a great programming language anyway, it's easy to use, very smooth to program and comes with

Smalltalk with Squeak. It was invented with children in mind, it's a great programming language anyway, it's easy to use, very smooth to program and comes with the full package of GUI, debugger, class browser, younameit. Children manage very fast and within two days, they're programming amazing things with it. Squeak's "Hello World" is a green turtle moving over the screen. (It's also a very nice and smooth programming language for grown-ups too.. :) Though I'd second the Arduino idea, too - great environment!