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Don’t overlook sound effects; they can help to "sell" the visual effects. Your kids should be great at vocalizing some effects.
If there’s going to be space ships involved, you’ll probably want to use a 3D animation package. I’ve been playing around with Blender 3D, a freeware package that’s surprisingly good. ( http://www.blender.org )
Here’s a composite shot I made for a scifi short I’m working on. I shot an actor sitting in front of a green backdrop. I chromakeyed him in front of a computer-generated image of a spaceship interior. Then I created an exterior shot of a spaceship, with a chromakey blue window. My actor and ship interior were then chromakeyed inside the window. BTW, Vegas7 lets you dynamically move and scale the elements of a composite shot.