Check out Corel VideoStudio X3

I've been working with the new version of Corel Video Studio X3. It has some really great features for building digital stories. I think kids as young as fourth or fifth grade can use it in Storyboard view and older kids and adults will use the power of Timeline view. 

You can output your files in lots of different ways. You can make a DVD with it's built in authoring program and can send it to YouTube with just a couple of clicks.

You can download a trail version of it at Corel's web site.