I actually saw this in use in a K class at the Jewish Academy here in town during my tour and was impressed.  A fun way to teach kids vocabulary using the computer. 

http://www.zigzagworld.com/hebrewforme/ 

They have a graphic literally of various scenes like the breakfast table, the classroom, etc. and the words for various items you can put in the room.  You drag the word over to the room and it puts the graphic of the item in the picture.  Pretty cute. 

This site has some wonderful games for kids learning Hebrew; Hang Man in Hebrew, Trivia quizes, a word search in Hebrew (covering lots of easy vocabulary for kids). http://www.j.co.il – make a point to try the word search in Hebrew.  Its very cool.

There’s a songbook that let’s you print some popular songs and prayers – the words in Hebrew.  Some songs are secular Israeli, others are holiday oriented.  http://www.j.co.il/songs/index.asp

There’s a fun application too that let’s you create a banner in Hebrew and allows you to use a variety of nice Hebrew fonts.  http://www.j.co.il/signmaker/index.asp