Scratch is just great for teaching programming right up to about 14 years old.
The normal game projects can be extended by using interface boards. The first board I like is the Pico board which can be shown in this video:
These can be obtained online from http://proto-pic.co.uk/picoboard/?gclid=CJryk6mI_LsCFSgTwwodbwcATw
S4A is a Scratch modification that supports simple programming of the Arduino open source hardware platform. It provides new blocks for managing sensors and actuators connected to Arduino. There is also a sensor report board similar to the PicoBoard.
It has been created to attract people to the programming world. The goal is also to provide a high level interface to Arduino programmers with functionalities such as interacting with a set of boards through user events.
The best guys for Arduino and Scratch are http://scratch-io.wikispaces.com/