Next bit of cool news, Kismet Kid the game is very much still alive: In fact it is going to be a series of free mini-games (frameworks) each with very different gameplay concepts, set in the Kismet Kid universe.
They are not standalone games, meaning anyone who wants to play them must have UDK. The point is they will help as a starting point for all kinds of different projects and show people what Kismet and UDK can truly do when it comes to more casual type games.
Being mini games, look for these to be released on a very quick basis. I have finally solved a major bug I was having with this whole "doing games in kismet" thing and set to move forward.