On the plant front you could try to make a small edible section with some salad greens and herbs (lots like shade more than sun). Looking forward to seeing what you end up with!

I believe mosses don't require much (or any) sun.

Also, I know that at Michaels (and other crafts stores) you can buy a Stepping Stone kit for kids. It would be cute if each kid designed their own stepping stone for the garden area and you could have a whole walk-way by the little garden areas.

we have a ton of shady areas around our house and we've grown some beautiful plants there. gardens can be interactive without being edible! it's just fun to watch the plants grow and change. Hostas are great in the shade, bleeding hearts, stella de oro, foxgloves... etc. you can go to your local nursery/farmers market and ask around for tips also.
as for watering, a rain barrel is a must. to make it fun for the kids, let them paint the barrel however they want! you can hook up a drip hose to the barrel to ensure your shady plants have adequate moisture.
bricks are easy for kids to move, so you could have them create the border for the garden... which will definitely give them a sense of accomplishment. look forward to seeing what you and your kids create! oh, and it's a good idea to ask neighbors if they have any plants that they are dividing up. sharing gardens is really fun!

You should think beyond plants, too! How about having a pile of dirt dumped on part of it so you can "plant" pvc piping for games of "telephone" and for excavating, construction zones, and for make mud pools. Too much dirt for your clean soul? Plant it with a ground cover like lambs ear and other such tactile plants, the shade won't bother them a bit.

With children's gardens, it isn't so much what to grow as what NOT to grow. Be mindful of things that are poisonous as well as spiny. Other than that, just plant it and see what happens!

A sandbox might be fun. We just built an easy one for our son out of cedar, sort of like a raised plant bed and then filled it with sand. Also, a fountain or rain barrel would be great for the kids to use to make mud pies in the sand box. Another idea might be some sort of bird feeder that the kids could keep filled... I've seen these at craft stores that can be painted by the kids...

If you choose to incorporate a sandbox, make sure that it can be covered, or you will be providing a giant litterbox for every cat in your neighborhood, and possibly raccoons as well. (Yuck.) We have found that for our children, container gardening works very well--it's a good height to really observe the plants, it's easy and quick to set-up, and satisfying to dig in and water. Pansies and primroses can often take a good deal of shade, and there are a lot of other choices as well.

There are so many beautiful ferns that would love a space like that. And with so many different types (the ones that unfurl are always fun to watch for kids) you could have a beautiful space.

I also second the idea of doing some personalized stepping stones. Great summer project for the kids and could create a fun little walkthrough for the kids.

And as the kids grow, you could have them create statues or sculptures for the garden to make it more personalized. And a fun crafting project to last over years, as they're abilities grown. Lots of "junk" can be used to make some of the coolest sculptures.

Sorry - getting a little to overzealous. But you've inspired me to find some shady little space to create something like this. I love the idea of a child's garden!

We use the stepping stone idea in our family garden. We save mementos from family vacations and add a stepping stone each time we come back. The last one was for a beach vacation where we saved sea glass and shells and pressed them into the concrete. It's nice to have those memories and searching for things to put in the stone is a great activity for kids on the vacation.

Herbs were always a great joy to me as a child. They're mostly pretty hardy and they offer a good range of sensory experiences like smell and taste and texture... they're fun to combine into home made teas and what not.

Making your rain bucket into flowing water will help cut down on the mosquito larva issue and most gardening/home improvement stores sell simple kits or you can get them online. This is also a great opportunity for the boys to play around with water pressure and sounds.

All that being said, I would definately be tempted to add some sort of musical element... I could totally see a container garden with a variety of size and shapes of containers and a few xylophone style rubber mallets to tap out the beat.

Besides the sand box there are plenty of other things to fill a "box" with such as mulch or pebbles etc that lend themselves to a variety of construction projects.

The fence itself can also be a great asset, you might attach butcher paper for painting, or even one of those new plastic sheets that change color when water hits them for re-usable painting.

Do let us know what you do with the space!

I would suggest some sort of ground cover that doesn't mind being stepped on, like maybe mondo grass, it is slow to spread and likes shade and tolerates dry conditions. Ferns, hostas, hydrangeas, azaelias, coral bells, ornamental grasses also like the shade.

How about a bamboo tee pee with American wisteria?
Some ferns can grow upwards of 6 feet--incorporate a small pond with goldfish that fills with the over flow of a rain barrel (make sure the rain barrel has a screen over the opening and you won't have trouble with mosquitoes)
plant the ferns around the pond so they benefit from that overflow.
A small pond in the shade will drastically cut back any algae problems you might have.
The wider variety of plants you have, the wider variety of bugs you'll see.
How about a weeping willow for playing under the umbrella form the branches provide.
Also think small scale nooks and crannies where exploring can be exciting.