whats to prevent the kid from turning the phone off and on again to exit the program and get normal access?
If the kid can replace the default launcher, she does not need an special UI in the first place.
(If all you want to do is micromanage your kid's life through GPS monitoring, is it possible to install a hidden GPS tracker?)
Now, if the kid uses the market to uninstall the Kyte launcher itself... then I'm guessing the stock launcher or a pop-up asking what launcher to use would come up.