Toontastic is a terrific iPad app that allows kids to make animated stories. It is currently only $0.99 at the iTunes App Store so it is a no brainer if you have an iPad plus a minimum of one child. We bought it when it was $2.99 and haven't regretted it one bit. I reviewed it a few months back here.
Anyhow, Toontastic are having a Summer Animation Contest asking kids to animate a favourite storybook. My 10 year old son immediately took up the challenge and animated The Giving Tree. You can see the result here. The amazing thing is that he did it from heart as we don't have the book itself here in the US.