A great way to teach logic and problem solving to students of all ages
The newer version, using the web, is a great alternative. However, it does require students to create an account in order to use it. The older version, while it has fewer capabilities, runs on the client computer and it is platform agnostic (windows, mac and linux). The version that you use in your classroom depends on the technology you have available and the age of your students.
How I Use It
I have used Scratch in many different ways at several different grade levels. Perhaps my favorite is when I used it with my 8th grade Technology Exploratory classes. Throughout the quarter, I walked students through the skills necessary to create a simple video game. At the beginning of each class, I would demonstrate one of the skills (keeping score, setting up a timer, etc), we would build one on the Smartboard as a class, then students would use the remainder of the lab time to create their own copy of the code. After we completed all the components, I give the students several debugging exercises to work through.