My kids and I did some hands on experiments with physical computing and electricity. Initially I only intended to do these experiments with Daniella, but Sophia seems to be pretty interested as well. Using an Arduino board, a breadboard, a 10OM resistor and a few wires we made a simple capacitive sensor. Capacitive sensors take human body capacitance as input and (depending on sensitivity) detect anything that is conductive. I wrote a simple Arduino sketch that would randomly draw colored circles on the screen when our sensor detected conductivity. Basically we took a bunch of household items – metal spoons, plastic spoons, cups, wooden plates, etc… and connected them to the circuit using a small crocodile clamp. When Daniella would touch a conductive object (like a metal spoon which conducts electricity), the program would begin to draw circles on the screen. One of the items we used was a piece of paper. While dry it would not conduct electricity; however when we dipped it in water and connected it to the circuit, the capacitive sensor detected touch once again. This experiment had a dual purpose – she learned how different materials conduct (or don’t conduct) and got a vague introduction physical computing.
You can find detailed instructions on how to create capacitive sensors on Insructables website (Turn a pencil drawing into a capacitive sensor for Arduino) and on Arduino Playground.