Lots of kids will gladly spend hours on their Xboxes, my own child included. He loves the environments of 3D games, and has expressed the desire to create his own. But existing PC-based 2D game creation environments do not hold his interest, he demands results that match the immersiveness of his favorite titles, and that can be played on his game console.
Brady Forrest from O'Reilly Radar posts about Kodu (nee Boku), a project from Microsoft Research that has been around for a couple of years, but appears to be almost ready for action. It looks like it is a very exciting, and innovative way for kids to create their own games using a visual "programming language" on their Xbox. They can also exchange games with each other.
Kodu looks very exciting, and we will definitely be getting it once it is available.