You can go to the tile section of any big box store, or even better, a tile specialty store like COLORTILE, and purchase glazing paints for tiles. As I understand it, after you have finished your art, all you have to do is bake it on in your oven. My mother in law did an entire bathroom with hand painted ivy tiles and it turned out really really neat.
Just turn your kids loose on the tiles with the paints and let them have a field day.
As far as "transfering" existing artwork, I don't know. The professionals in the tile shop should be able to tell you if it can be done.