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Alice is a 3D programming environment for teaching kids introductory computing. It's free (of course), and is sponsored by Carnegie Mellon, so it's high quality. If you have a child interested in computing, this is a great place to start.
Story Stones Ideas for Kids - 5 ways to make and use story stones to develop kids' storytelling... So creative!
Collection of Digital Storytelling Applications.
Homemade Smart Board. All you need for this to work is a computer and a projector. Save thousands of dollars. $4.99