My (now 8 yo, but 7 at the time) daughter found Scratch to be mildly interesting, but not really compelling. She'd use it every now and again. But, she's pretty addicted to Kodu. I think the 3d aspect of it, as well as a more narrow topic (game/world creation and interaction) made things a lot more understandable for her, and allowed her to focus. She's still learning the same concepts, I believe, in the end, and that's what I'm after. I think of it as really a 3d Logo.
She's into 3 and 4 page programs now, with multiple actors, and fairly deep storylines.