I think that, as an experienced cacher, I would stick with a cheap "real" GPSr for the kids. The two-button design with large basic display is the only attractive feature of this unit. Anything else is a negative aspect or neutral at best.
My 7 year old is capable of working my eTrex. Both he and my wife have trouble when they accidentally switch to another screen, but they can use it when it is set up to go to a cache. My 3 year old loves the hiking and finding portions of geocaching but isn't interested in following the GPSr yet.
I guess I could equate this to any other gadget geared toward kids. The Fisher Price digital camera, for instance: It is durable and built great for kids, but the camera itself is low quality. Thus, I never bought that product. If I get them a camera, I'll get them a cheap but decent quality camera. In the same vein, if I get my kids a GPSr, I'll get them a cheap but decent quality GPSr.