Have you read about the Hole In the Wall project? http://www.greenstar.org/butterflies/Hole-in-the-Wall.htm

I'd suggest a similar model for education. If this is to be within a school you don't need such an emphasis on durability, so you have much more options for UI(the original lacked a keyboard). Definitely include a Hacketyhack(Ruby) environment, several typing games, etc.

You will probably find that the children will explore and suggest far more interesting avenues than you will initially consider. As long as they've got a flexible starting point (Edubuntu + a good selection of webapps and tutorials pre-bookmarked) you are bound to get results.

edit: please please do not include BASIC. Ruby or Python are far more useful as educational languages. Not only are they far more useful and educational, but I guarantee the children will surprise you with innovation you simply cannot get from BASIC.