Let me start off by confessing that I (thankfully) don't have any children of my own.  I do have three very cute nieces, however, that love spending more time with their virtual pets with each passing day.  This seems to be a common enough trend that it's worth mentioning that there is an alternative to this addiction; creating games with Popfly!

Check out this great post by Michael Leonard, an engineer on the Popfly team, about helping kids explore their creativity.

http://thesoftwarestories.com/blogger/2008/05/creating-computer-game-with-my.html