It looks like great fun for the kids. I learned from a friend recently that you can use ordinary Crayolas on fabric and then iron it between layers of paper towels to get the wax out. It goes through the wash surprisingly well. The kids might find that more manageable than the pens because they don't bleed and there are more colors. If it were to fade a little after many washings, they could have the pleasure of coloring it again. It's a good idea to stabilize the the fabric with freezer paper on the back before doing the coloring to keep it from puckering under the force of the crayon. If the design is small, you'll want to sharpen the crayons often. Here's an example someone posted showing a border design she is doing with crayons and embroidery:
http://www.quiltingboard.com/picture...s-t195717.html