I was so determined to keep video games out after seeing how addicted my nephews are. But then I agreed to get an old nintendo off ebay (just super mario bros) in an effort to improve processing speed or something, I can't remember what brain thing it was LOL. That's been ok, they're not addicted. But we recently got a vacation home and my nephews donated their old X-box for my kids to play with while there - I hate the 3d stuff. And a friend just gave us WII Sport but we haven't played it yet.
I have made them earn computer/video game time though occasionally we fall off the wagon (I have a little chart on the wall in the kitchen). They get points for doing various random things (5 points for unloading the dishwasher, etc.). Points = minutes of video or computer game time. 5 or 10 points for practicing piano without prodding, same for reading a book that's of significant length for them, same for cleaning up toys without complaining (ok they still complain lol).
And we usually limit playing time to weekends only.
If it's any consolation, a friend of ours recently admitted to having played thousands of hours of video games in his youth, and he's very, very successful and sociable (he's easily HG).