I've built a few cars with my daughter (now 5.5yrs) starting when she was 3 or so. Aside from a little episode where my wife called poison control it has been a lot of fun.
I let my daughter paint several bodies. you can imagine what a body painted by a 3 year old looks like. I use the parma fascolor water based paint and let her do what she wants with it. I actually turned the paint into a color lesson. we started with red, blue, yellow, and mixed up some green, purple, and orange.
we started before she was reading, searching out parts from the trees was great for letters and numbers practice.
I'll post some pics of her cars tonight.
I've not done much yet with my son(2.5 now), he is mostly into dumping out the bins of tires, bodies or spare parts and making a mess.
Here is a thread from 2 years ago with pictures of our first truck:
http://www.tamiyaclub.com/forum/index.php?showtopic=33666