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About the parental control thing:
Ultimately there's no software for automatic parenting though. Open communication is one of the better starting points.
Or you can do what was suggested with the host file site blocking thing. To do that via the GUI, all you have to do is click on the network manager and go to the hosts tab. After entering the administrator password, you can add those hosts you want to block or whatnot to that list, and as suggested, could point them to 127.0.0.1 or I think any IP really, could even redirect them to www.google.com or something I'd imagine.
About the kids using Ubuntu thing: I think it's easier for them to use the non-Windows-like GUIs than adults who are accustomed to Windows. However, KDE is Windows-like, if you want/need that, but Gnome is so much easier than KDE or Windows IMO that it doesn't take half a brain for anyone to figure it out.
Hmm how do I run a program? Well, it says "Applications, Places, and System", gee I wonder, maybe under Applications? Oh, it's laid out by type, like Internet, Games, Office, etc, oh look there's also a little Firefox icon I can click on. No more rummaging through Start > Programs > Company Name > Stupid Subfolder > Program. It's just click...move..move..click. I honestly think it's one of the easiest systems to learn for anyone and everyone and studies have shown it to be quite simple for kids to pick up and use. Now if you want an even "easier" system, there are plenty of huge GUIs that you can use with massive icons that you click on. You can even install XBMC or MythTV (though XBMC is much much simpler to install) if you want a simple interface for accessing your media.
Linux is just so plug and play now it's funny, we use it for everything here, as a RAID file server, for a HDTV PC for watching media and desktop use, and for our desktops, and since lots of hardware works out of the box with it, after you make sure you get past that you're set, it really just needs more games (though many Windows games can be run through Wine, but it lacks support for most of the newest ones) and needs cross-distro packaging support so that installing software from any website is point and click like it should be.
I like it that Apple exists and helps compete with Microsoft and all, the more the merrier, but honestly they can take their overpriced hardware and shove it. Some if it's good, but most is overpriced, and who wants to be locked into one small platform that you can't easily upgrade?