I've taken my kids (now aged 12 and 9) to about a half-dozen orienteering meets over the last couple years, and they've loved it. In fact, over the weekend my daughter was urging me to take her to the 10/17 event, since we haven't been to a meet since last spring. It's a fun way to get the kids running around out in the woods, and isn't as committing as a full-day/multi-day hike or backpacking trip.
When we started out, the kids divided the responsibilities: Katie would navigate, while her little brother Adam would punch the passport at the controls. Now that they're both older, they both help with the nav, though Adam still likes to wear the transponder on his finger. (Our local club went digital last year, so the old pin-punches have given way to electronic punches.)
My experience has been different than Keith's, however, in that all the O-meets have used 1:10K maps, not the normal 1:24K topos that most of us are used to from BC hiking. (The couple adventure races I've done have used 1:24K's though...) As he notes, O-maps are MUCH more detailed than the 1:24K's. If you haven't seen an orienteering map, I encourage you to take a look at one sometime. As he said, they're works of art!
The scale difference has caught me out on several occasions, as I've over-shot some control points thinking they were farther away than they actually were.
While there's not time, nor usually the need, to do complex navigation tasks like triangulating your position, O'ing has definitely improved my skill at matching visual cues against landmark/topo information on the map.