I just installed Qimo, an Ubuntu-based distribution for kids. If you already have Ubuntu, just run "apt-get install qimo-session".
I just started poking around, but I like it already. I had Edubuntu previously. For some reason, this seems simpler, neater, easier, and more engaging. I think Edubuntu has everything Qimo has, and more, but Qimo presents it in a more compelling manner.
By the way, Qimo doesn't provide parental controls, so you'll have to install something extra if you're into that sort of thing.