I should just Mod this up, but I'll add to it.
I work with a lot of students at my school and I've purchased a few KANO kits. They are great and appeal to kids who want to program and kids who want to make cool cases in woodworking shop... Grab one and try it out. If it doesn;t work, donate it to a local school's computer club.
I also use RPG maker (There is a free version on sourceforge I think) which can be used to make some very elaborate 2d rpg style games.... At first the kids I work with love the mapping and simple switch oriented programming, but after a while, the kids are learning scripting and the logic behind all programming.
But, yeah, Scratch is great too.