Good idea. Actually, VL could be made both more appealing to and better for kids than what they're offered now.
Any unixish for kids has to at least consider KDE. I'm not a KDE user myself, but was very impressed by the KDE 3 Live CD nightflier produced a while back. No idea how theming would work, but to stay 3-ish, it'd be Trinity now.
I hear Trinity work has slowed, but our interest might help.