I do insist on following rules OR explicitly changing the rules for everyone. I read this somewhere and we use it when a child is frustrated about losing: "Do you want me to play my hardest, or no?" That way there's not the creepy aspect of letting them win without revealing it, or allowing them to openly cheat, but they don't have to be frustrated. Then if they DO beat you honestly, they know it and it feels awesome.
It also helps to find games with a big element of luck. For instance, my 3yo frequently beats me at Uno. Admittedly I am probably not playing 100% intensely, but I'm not absolutely forcing myself to lose on purpose, either. I also will sometimes suggest moves to a child, but that's different than allowing them to cheat, IMO.
