A little background - this one is intended for people with no background in working on bikes. If you've worked on bikes you probably don't need to read this. If you haven't this should be clear enough for you to be able to get it.
Balance bikes are the trend in teaching a kid to ride a 2 wheeler. The idea is to allow them to learn balance before they have to coordinate pedaling. There are very nice custom bikes built specifically with this in mind. However, they tend to be a little spendy and when your kid is ready for pedals you've got no choice but to buy an entirely new bike.
There's a pretty good background of what I'm talking about here:http://chicargobike.blogspot.com/2011/01/make-your-own-balance-bike.html