My wife was saying the other night that some of our friends are surprised that we, especially I, rarely allow our sons (age 6, 4, and 2) to play video games, and on those rare occasions, we limit the time to less than 30 minutes and we limit the possible games to a few (educational ones and Backyard Sports ones) that we have chosen. Given that the majority of my oldest son's friends have some type of portable game console, or easy access to a gaming PC/console, I occasionally wonder if we're being too conservative about it.
Now there is no perfect way to raise children, and we certainly won't win any parenting awards, but as an avid gamer (currently alternating between Call of Duty 2 on XBox 360 and Animal Crossing on DS), I have been struggling a bit to explain why I don't think it's a great idea for children to play video games without coming across as a Jack Thompson-like lunatic, especially given that I work and personally invest in the sector. Then today I read a letter to the Editor of the gaming blog Kotaku which explained it more eloquently than I could ever say - the direct link is here, as is a long list of comments, and it's worth reading if you have children interested in video games, as they all seem to be.
At the end of the day, my personal feeling is that video games are an amazing form of entertainment, but that they have about the same value as television, and should be treated in a similar vein, not held up as some type of wonderfully creative activity whose value far exceeds activities such as reading or personal social interaction.