I don't know if encouraging your kids to color on the walls is a good idea, however I do think any opprotunity we can give kids the chance to use their creative juices, I am all for it.
Graham & Brown leads the way with their black and white frame patterned wallpaper. The applications for this stuff seems endless. Aything from a childs room to a new way to showcase family photos! I also think it could be a cool guest book. Maybe lend a wall to this paper in an entry way and let guest sign just before they leave.
5.5 Designs throws a twist in their version of interactive wallpaper. This style actually stimulates the mind. How about a wall of word search in the bathroom, or tic tac toe in the game room.
Jon Burgman also has a collection of wallpaper that is like a life size coloring book. The walls would be a constant change of scenery. It would be a great way to customize the wallpaper acording to the color palette in the room.