Because I'm not sure if it's stage or walk around, I'll just assume it's stage. Or parlour, whatever.
I'd echo the statement that rope would be a great idea. I'm currently working on Richard Sanders' Fiber Optics, and it's a great routine. I'm sure any rope routine would be good, though. I like how visual a rope routine is, and how you can inject so much humour into it.
Linking Rings is also another idea. I'll be working on the Ninja Rings routine once my Gold set of Ninja Rings comes in (MJM just recently set out a fresh batch--I've had it pre-ordered since November, so you can imagine how happy I was, haha). I've watched the Ninja Rings DVD quite a few times already...it doesn't look easy, but boy does it look fun! Obviously the Ninja Rings aren't all that big, so they won't play to a huge audience, but it should work well for an audience of up to 20-25 people. If I wanted to cater to a bigger crowd, I'd probably get some full sized rings and learn a routine with those (I probably COULD apply some of the Ninja Rings routines to the bigger rings, but most sets comes with more rings (8-10), so I'd rather take advantage of that and learn whatever would take advantage of that fact).
I've yet to actually put together a kids show, but as you can tell, I like to stay fairly classic when it comes to (non-mentalism) stage work (the exception being if I'm doing a shorter show--I'm not sure I'd accept more than a half hour, as it stands).
With that said, I'd also suggest cups and balls. Another classic, and a great one (when performed right).
I'm not sure I'd suggest sponge balls, just because it's more of an intimate effect for a smaller crowd. It's great for the person you're performing it for, but I don't find it plays very big for the others (maybe it's just my presentation; I dunno). Don't get me wrong, you get a reaction...but it's just not the same. Like I said, it's probably my presentation--I'm used to presenting it to tables in a restaurant, not to large groups. So, you can still give it a shot, if ya like.
Other than that, feel free to explore what's out there. Good luck with the show!