Flash paper really catches their attention. However, first I'd ask the person hosting the party if they mind fire being used in your act.
As far as effects, personally for kids shows, a Cups and Balls act always gets good reactions if you work it with the right patter. Sponge balls are a must.
Strat-O-Sphere I believe is underused. Same goes for
Rocky the Raccoon. The Professors Nightmare also never fails. You can find it in most beginners "Learn Magic" books. It's simple, but it kills with kids.
The best tips I could give are set up a magic table to perform everything on. Then, hang a ditch bag off of it. Whenever you are finished with an effect, throw everything in the ditch bag. This prevents kids from messing with your props, and also makes sure you don't have the performance area cluttered. The table also helps set a barrier between you and the kids which in
most cases, they will not cross.
Here's a biggie:
Avoid card tricks. Too many chances for kids to mess with ya. Things that can happen include, but are not limited to, not picking a card in the manner you choose, not placing the card back, knocking the deck over if it's sitting on the table, and even crushing the card they picked. Also, card tricks generally don't register for younger kids. What I mean by that is they may not understand what has happened. That's not good. If you feel the need to do a card trick, do something such as
The Magicians Insurance Policy. Just change the patter around a bit to fit kids.
Also, if you have one or can get one: never, EVER underestimate the power of the
change bag. Mix it with candy to give away as a closer, kids will love you. Get permission to give the candy away first, though. Parents may not want the hyper kids. And never do it first, they will be spending all their time worrying about who got what color or flavor, and crinkling the wrapper paper.
Lastly, make sure you involve the birthday child in many of your effects. Even if it's just having them come up to wear the special "Magic Hat" to help make the magic happen.
Well, I gotta run, and that's about all I can type for now. Hope this helps!
If you have any more questions, feel free to shoot me a PM.
-ThrallMind