Tony,
I've got 3 kids, an almost 7 year old boy, an almost 5 year old girl and an almost 2 year old girl.
My son Jacob is interested in most things space and astronomy, and has been able to recite the planets in order and how many moons they each have for a couple of years. But he's also interested mainly because Daddy is interested

He likes watching the shuttle launch etc, and the few DVD's I've got on spaceflight etc he enjoys watching from time to time.
The girls are too young to really care, although my 2 year old LOVES looking at the moon and gets really excited. Of course i'm just talking naked eye, not through the scope. It's hard trying to explain to her why we can't see it EVERY night though when she asks.. (clouds, wrong phase etc). She likes looking at stars too.
I take Jacob out to look through the telescope from time to time, he likes looking at the moon and planets, but I've found he can also understand star clusters quite easily. I make sure it's not above him by asking him "what do you see?", and if his explanation matches what I see, then I know he's "got it". I ask how many moons he can see on Saturn etc, and he's usually spot on (5 moons around Saturn, etc).
Of course it's tricky getting them to approach the eyepiece with care, not to bump their head on it, and not to lean on the scope as they move in. I usually just guide him in until he's got his bearings.
I had a great time with my son at IISAC earlier this year, just lying on the grass (on the last night when it wasn't dewey) looking for meteors and satellites. Sometimes they are the best moments spent together without equipment.
The main thing is, I make sure I don't
force my interest on my kids. I'd love it if they turn out to have an interest in space & astronomy, but it has to be an independant interest, and not just feigned interest because Daddy loves it.
Hope my input helps!