Smories is an online storytelling video site for kids. Just launched, it has 50 story videos currently available but with 50 more to be added each month you can see it promises to keep shortstuff occupied. Stories are graded by suggested age and are read by anonymous (British) kids. Free, free, free. [Thanks Hiren!]
Smories are free original stories for kids, read by kids. 50 added every month.