I thought this post about playing WoW with a 3-year-old, was pretty awesome. I love playing games with my kids and have been doing so since Geeky Boy was 3. We played Lara Croft on PlayStation 2 together. At that time, we switched off managing the controls. Geeky Boy would often hide for the gory parts (which weren't all that gory given the quality of the graphics). And he often needed help with the more complex moves. I remember when I finally needed him to help with some complicated moves when he was about 10 or 11.
I've tried to get my kids to play WoW with me and they do on occasion, but they're hooked on other things. Geeky Girl likes The Sims and Geeky Boy is still into Runescape. I play Sims too, so Geeky Girl can't talk to me about it, and although I don't play Runescape, it's similar enough to WoW that Geeky Boy can share his adventures. I like that it's not a separate world that I don't understand and blow off. With games that involve real people, we talk about how to behave and how to respond to situations. Geeky Boy actually communes with many of his real-life friends via Runescape just as I commune with friends via WoW. We don't look at each other like we're crazy when we talk about having conversations with people via a virtual world.
The kids have also recently rediscovered Nintendo 64. Geeky Boy bought the console a few years ago. He thought he'd given it away until he unearthed it from somewhere in his room (I know, scary). So, they've been playing Mario Kart on it even though they have Mario Kart for the Wii. N64 was past my prime, but I remember playing with my stepbrother when he was their age and I was in college, so it's a fun trip down memory lane for me as well.
To some extent, I think game playing for kids can be about escaping the adult world, but my experience has been that my kids want me to be there with them, to share that experience with them. It's really a nice way to hang with your kids and have fun yourself.