A free fun tool for families that let's kids (or adults) create picture books using a simple interface and clipart graphics. You can't print yet - but given how professionally done the site is i'd bet dollars to donuts that there will soon be an option to have a nice color book of your story professionally printed and sent to you for a fee. Seems reasonable.
from www.downloadsquad.com
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Storybird is a service that uses collaborative storytelling to connect kids and families. Two (or more) people create a Storybird in a round robin fashion by writing their own text and inserting pictures. They then have the option of sharing their Storybird privately or publicly on the network. The final product can be printed (soon), watched on screen, played with like a toy, or shared through a worldwide library.
from www.downloadsquad.com