Great topic. The approach at our house was, I took my 7-year-old daughter to the art supply store and she picked out spray paint. Then we stripped her bike (a very un-Riv hand-me-down with a suspension fork and grip shifters) to the frame and hung it from a tree branch, and she painted it (green and blue, it took her 5 minutes). Then we put it back together (mostly I did, but she helped) and put a basket on it.
So it's Riv'd out in the sense that she made choices about it, the whole process was fun, and she loves it. She knows how the gears work. When she's taller we'll find another cool frame and then we'll work on friction shifting.
We kept the components intact, including the handlebar--she doesn't care about that. We added a bell and the gaudiest reflectors I could find. And we didn't spend much money, so I don't freak out when I see it standing in the driveway without a lock on it.
Jim in Rochester