Hi 6S9L,

I started teaching guitar about 2 years ago and I found a great site with a lot of good teaching materials on it. You can find it here:
http://www.teachguitar.com/
This guy has a lot of great articles on the subject of teaching guitar and some great examples to use too.

It's harder to teach younger kids simply because of their physical contraints but more importantly is their ability to focus. What I've found to work best is to create little lessons that move them slowly through the process so that they can play something basic right away. If they can see a little progress early on then they're less likely to become frustrated and tune out altogether. If they can get a little confidence with a basic tune or some simeple chords then they're more likely to hang in there. (start very basic)

I usually start off by teaching students this song that you can find on the site above, called "Single String Boogie". It's really basic and sounds kind of like "Peter Gun". I play this song as a duet with them so that they're playing only the single notes and I'm backing them up with a rhythm part.

I start them out with some open-position chords after they have a few single-note songs down. The hardest part of their chord work is learning to change chords fast enough to keep the song moving along without stopping. The way I work with them on this part is to have them play only one chord at the beggining of each bar so that they have a long time to change to the next chord. Then I play the rhythm part and have them do their 1-chord-per-bar right along with me. This helps to build up their speed and confidence a little. You can even use the same "Single String Boogie" song as your chord progression.

I hope this helps, -- Jim