This machine is bought by a lot of quilters to take to retreats:
http://www.overstock.com/Crafts-Sewi...7/product.html
There is a nearly identical Janome marketed to adults (minus the Hello Kitty theme) and it's got a great reputation for ease of use and reliability.
I have never heard of any toy machine that functions well enough to teach a youngster to sew. They are so frustrating to operate that they could turn a child off of sewing forever.
The one exception is a Singer antique toy chain-stitching machine which is collectible and funtional, but I can't remember which one it was - the model 24, maybe?