I just found a rather interesting program, called phun. The main idea of the program is creating simple mechanical "creatures" cars, catapults and the like. I embedded a short video below:
I played with this little program a few hours yesterday.. There are also features not shown in the video - turning gravity off, water, chains and so on. I doubt it can be used to study physics - even for schoolchildren, but it is a good way to expose children to mechanics. Overall a very nice program - plus it is free.
You can see more about this program in the official video: