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I used Game Maker a few years ago to create a few games for fun. It is bit of a resource hog but it is easy to use. GM comes in 2 flavors lite (free) and pro ($39.99). The lite version should do everything you want but $40 is not bad for full functionality. GM is drag and drop but it does have a script object. All my game I used the script object for 95% of the functionality. There are very few things that the drag and drops are needed for (bouncing off objects). I hate drag and drop since it does not teach you anything. The other thing you might want to looking into is finding a freeware or a cheap game that allows for modding. In the early 90's I modded the hell out of Red Alert. The rules.ini file is editable in notepad. Now you can just download Tibedit and have a GUI for modding. I have heard (but not seen for myself) of a mod that turns RA2 into a space game. I have also recently d/l Aquiria http://www.bit-blot.com/aquaria/ . The website says you can mod and change graphics too. I have been thinking of recreating one of my GM games using the Aquaria engine. Modding is a bit of a side step but it will allow your kids to use an already developed engine and it may give a better foundation for understanding how a good game works before they actually decide to make one themselves.

Thank you! I was getting diappointed that noone here had heard about such an amazing indie game. :)

Aquaria home page

The surprisingly awesome shareware game. Large and detailed. And the demo can play for like two hours, so you get a pretty good idea of whether you'll like the game or not.

It's an underwater fantasy action-adventure game. See videos here.

It's being released on Dec. 7th, according to its website.

Aquaria looks pretty amazing, especially for an indie game. Can't wait to try that one out.