Wait, I just realized I probably misconstrued your intent for this class.
You probably don't want to teach programming, but rather design. I think
a good project for that is to think about making a Text-based adventure.
This is a very old genre of games (which is still around). These games are
a little like playing Dungeons and Dragons in that the player has to use his
imagination to visualize the scene. The game would only give a description
of the room you're currently in, the items or monsters or NPC's in that room,
and which direction has an exit (into another room, where you would get
another text description). The player can pick up objects, use objects,
talk to NPC's, fight monsters, and move via any of the exits in that room.
It's very easy to visualize because you only deal with one room at a time.
Kids can create a plot for their game, and draw a map with each room, with
the connecting exits, and mark what's in each room. Then, they'll have a
nice basis for a game without yet having to worry about any actual computer
programming.
Here's a list of some Text-based adventure games. Zork, Adventure, and
Oregon Trail are some of the most well-known.
http://en.wikipedia.org/wiki/List_of_text_based_games
