I've found that if you can get them to do a bit of theory before they find piano boring, they'll enjoy theory. The kids whose parents have dragged them to piano for two years have no interest in doing 'written piano work'... but if I get to them early enough and do little games, flashcards, fill in the blanks, etc, when they're still fresh at the piano, it becomes a habit like scales.
I've got a four year old with an awesome eye for intervals within the octave (that's a huge bonus when little kid music starts jumping around at seemingly random intervals).
Theory is EXTREMELY important, and there's no point giving a little kid pages and pages to do at home. It's also hard not to eat up a 30 minute lesson with what you'd think is a bit of theory. Also, I find the theory lessons in method books VERY crappy; most of the kids I teach can't relate to the lessons, or would rather I start from scratch and build on the concept on a scrap piece of paper.
Say for example you come across a 'song' in a method book that starts using legato - take 2 minutes an explain what legato is; show them the EXTREME opposite (it's really easy to make them laugh by bouncing your hand around with crazy staccatos), and allow them to listen to the difference. For the next few pieces in the book, make them identify the legato parts, etc.
Usually every second or third 'song' will have a new concept like this... it's MUCH easier getting them to notice details when they are starting, then overwhelming them with a billion things when they suddenly decide to 'perfect' an exam piece.
Oh ya... remind parents to look in the books. About 1 out of 5 parents actively read the book and write little things; the others I'll have to corner and pretty much talk to them like a little kid "read the damn book! your four year old isn't comfortable enough reading my notes from the lesson, and they need your help!"... so many parents come back the next week - "our kid was confused"... I say "did you check the book? I gave lots of examples, and explained step by step what to do"... "no".... "well maybe you should check the book this week, because I'm very clear with what I write"... etc.
My posts turn into ramblings, because I'm pretty much typing what I'm saying aloud to myself, and it's nearly like a conversation with myself

...treat the kids' parents like they are brain dead - chances are they won't check on their kids, won't read the book, and will simply say "go practice your music". Make sure that they are involved; that little bit of encouragement from parents takes kids a long way. Plus, you can't expect a four, five or six year old to check their music agenda every night, and manage their time to finish everything. The kids whose parents actually read the notebook usually come with something done the next week. The other kids stay stagnant in the same spot for several months, then get bored and want to quit.