The Shakespeare For Kids Series the great. My kids love the pictures drawn by 7-8 year olds on every page, as well as the letters written by the children. They also include the famous quotes.
We went through Hamlet, I thought the kids might be scared, but they were actually OK (ages 6, 8).
At some point, I would like to take them to The Shakespeare Festival in Oregon Ashland with the Elizabethan Stage. http://www.osfashland.org