I allowed my son to have a few games on GT, but I made sure it was with people I'd played before (I asked them first!!) and I was OK about him playing, and I supervised too, he never went on without me looking over his shoulder!!
I've not heard of any games sites just for kids, but if there were I wouldn't let my kids near them. Its like 'kids' chat rooms, its where half the paedophiles meet kids. Too dangerous. How would you know it was really another kid they were playing? I think the only way to keep them truly safe is full supervision when they are on the net.