[rally]

A few other ideas to add
iPad apps - they have knowledge apps, guides, planetarium apps etc
Books inc Space travel, Hubble images, the NASA spaceships and programs, SciFi etc all add to the interest
Magazines
Trips to the local observatory or local club star parties where they can experience other people's equipment and knowledge
Astronomy Cards

Fascination and Interest can be kindled and maintained by many things - it doesnt have to include expensive equipment, but if real interest and enthusiasm is shown, then IMHO they shouldnt necessarily be limiting their budget to such a restricted amount.

If you can get out to some club star parties, you will soon see if its a passing fad or a genuine interest.
But it can be a Catch22 if the budget is so close to zero so as the make the whole experience a failure.

Knowing where to look and at what times is the key - young children need their interests satisfied in a relatively short time frame - say a couple of hours, they also need to get to bed much earlier - so viewing times can be limited.
No freezing cold for too long, no Mozzies, hot drinks and foods
The night's experience will be remembered more fondly if its short and sweet, packed with a punch and without personal hardship and with the least amount of time finding objects or having to adjust vision to see in the eyepiece (ie no point trying to have a kid start using averted vision to try and see a faint fuzzie that requires skill to observe)

The types of objects that are to be viewed tend to be different - Kids seem much more interested in the 2 big Planets (Jupiter and Saturn) , the Moon, big Nebulae and large Galaxies than say Doubles, fuzzy galaxies and asterisms.
So the choice of subject and how its presented is going to have a much greater bearing on the success than the level of gear.
The average keen amateur wont be setting up when the moon is out bright and early, but that is exactly what you want for a child to have a partial moon out early in the evening and then watch the Terminator move across the moon.

If good gear is bought then at least it will hold its resale value somewhat
But you don't need to buy new gear to enjoy superb views - second hand equipment generally works just as well.

Having done a bunch of Kids star parties, you need to get the recipe right - so its not the same as dealing with a bunch of hardened adult amateurs.
Fancy dress star parties, prizes, novelty giveaways and colour images or live video generate a lot of interest.

Good luck

Rally