It would depend on the program, really.
I was in some Sunday School / Children's Church classes that simply watched a movie, colored pictures, had snacks, and goofed around. Filling kids full of sugar and sending them home with a craft and color page of Jesus with children on His lap isn't exactly what church (children's, jr.'s, baby's, adult's, or otherwise) should be about.
On the other hand, Children's Church can be a really good way to, as already stated, give younger children the "milk of the word" and to connect with them on their level so they will understand the Bible stories and learn about Jesus.
Giving a personal experience, in my church there are a handful of kids (2 - 12 kids ranging ages 4 - 11), some of which come every Sunday, and some of which come a few times every-so-often. A couple years ago, during a Fall Party, I had a Bible Trivia game set up to keep the kids busy. I was absolutely horrified and dumbfounded when the children did not know who Moses, Adam, Joseph, and Noah were!
Upon speaking with the pastor (who happens to be my grandpa), I, with the help of my mom, set up a simple Children's Church program for the kids. Beginning with Creation (Genesis 1:1) and working our way slowly through (we're now at Moses crossing the Sea), we read a story from a children's Bible. Kids under the age of 6 are given pages to color that go along with the story. Afterward, we ask the kids trivia questions to test and see how much they paid attention and learned from the story. They get points for answering the questions right, and we have 2 teams set up that compete against each other, creating a natural environment for them to WANT to learn and pay attention. A simple memory verse for each week wraps the lesson up.
A couple months ago, we had a pizza party for the Children's Church and played a Bible Trivia game, asking them questions from the last year-and-a-half of lessons. The pastor and I myself were so happy to see them answering the questions right, some of them popped off without much thought at all! It's amazing to me to see how much they have learned simply because the Bible has been presented in an environment and on a level they can associate with and learn from.
Our class doesn't have snacks (except for a piece of candy as reward for saying the memory verse), it doesn't have crafts, it doesn't have movies or games. Yet the kids love coming to learn about the Bible.
That being said, No, not ALL Children's Church programs are bad. However, there does seem to be a lot of fun-and-games with no learning going on in children's classes.
I myself was raised in the service with my parents. And I learned a lot from being in the service. It's hard to say either way, but perhaps I could have learned more being in a children's class. Regardless, being in the adult service DID help greatly in creating in me a desire to be in church for the sake of listening to the sermon...rather than a desire for snacks and games.
I think (personal opinion) a lot of teens are bored with church because they never developed a desire for God...they never outgrew the mindset of being entertained in children's classes. And if it takes entertainment to keep people coming to church, then something is wrong. God's Word, plain and simple, should be enough to draw people who are earnestly seeking Him.
Someone said something about children aging 8 - 10 should be in the adult service...honestly, I think it depends on the child. My pastor, my mom, and I decided to send kids 13+ into the adult service. Teenagers definitely should be in the adult service (handicapped are a different subject). 11 and 12-year-olds...possibly.
However, I think regardless of age or class/service, if the person/child is learning and continuing to grow, where he/she is at is fine. When the learning and growing begin to stop, then the person needs to advance to the next level.