We just let our eight year old pick. She's very tall, kid is doomed with mom and dad 6' plus. She test rode some geared cruisers, then decided she wanted something like daddy's. She still too small for a 24 so it was tough to find something just right, but then she saw the Pink Specialized Hotrock 20. She'll need something bigger in a few years, but this one will do. I thought hearing would be a challenge at 8, but she picked it right up.
She really wants a road bike. I thought we'd find a hybrid, but no dice.