Wizard 101 is free for a little bit. Once you beat the first area you have to buy access to the others.
Toontown is also a good kids game and it is entirely free to play, though you can purchase added features if you want to.
I have also heard about kids liking a game site called Roblox. You get to make the levels and everything, so it is a site of tons of levels that other kids have made.