Keep in mind that there's more than 1 version of the prog. There's the original that came out in the 90s sometime, then there are more recent versions with more eyecandy (deluxe & 3d).
http://en.wikipedia.org/wiki/Kid_pix
http://www.grenier-du-mac.net/fiches/applications/kidpixcouleur.htm
http://www.youtube.com/watch?v=TA2t09mkbDQ
We had the kidpix prog on a mac in highschool (but the prog was available for windows too), it was my first experience with any kind of drawing software. The animated stamps in that youtube pic are like the ones I remember. I also seem to remember a martian/UFO one, but I'm not 100% sure. When looking for pics or vids, avoid anything with "deluxe" or "3d", those are later versions.
Do you remember these monochrome photos?

They would act as a sort of eraser, you could "erase" parts of your existing drawings by selecting the photo brush, then you could draw on top of that photo.