@boomerang,
I'm not sure if sozlet and I play video games or not. (E.G. definitely doesn't.)
We have an iPod, and there are a lot of games on it. I love Angry Birds (which might qualify) and Words With Friends (which I'm pretty sure does not).
Sozlet's current major game is Temple Run. She's very good at it. (I'm OK.)
We don't have a Wii, or a Kinect, or a Playstation, or anything else. Sozlet has gotten tragic about it at intervals but actually is mostly OK with it. She plays videogames at friends' houses, and especially likes the dance games.
We don't have anything mostly at E.G.'s insistence. I'm neutral to positive about videogames. I had a bit of an a-ha moment when we were having a conversation with my mom about why she didn't let me go see "Star Wars" when I was a kid. (My whole class went, but not me. Sniff.) He was taking her to task for it, and I realized that there is a very similar dynamic going on with sozlet and her friends -- she's pretty much the only one who doesn't have any sort of a gaming system in her house.
My hesitation is about the grumpiness/ anti-social thing FreeDuck mentions (yes, that happens to me and definitely to sozlet) but also what happens on the occasions when one of her friends brings their iPod or DS over. The kids slump on the couch and play games. And that's pretty much it.
The rest of the time (which is the vast majority of the time), they do all kinds of crazy stuff. They go out in the backyard and play survivor games. They make movies. They stage fashion shows. They make things. They pack provisions and go exploring for a couple of hours. They TALK.
From reports from sozlet and her friends' parents, a lot less of that happens at houses of friends with gaming systems. It's not that they ONLY play videogames or watch TV/ movies, but it's often a pretty big part of what they do.
Some kids basically refuse to come over here because we have a tiny TV and no gaming system and one iPod and I usually need the computer for work. Sozlet seems sincere about saying that she considers that a problem with the person, not with our electronics.
We don't have any hard and fast rules but if sozlet's been on the iPod too long or if she has a certain sort of manic "MUST DO THIS NOW" sort of thing going on, I tend to say "OK, time to wrap up." I usually give her a while before enforcing it.
Playing games on the iPod seems really good for her when she's had a rough day and needs to just calm down for a while. I don't have a problem with that.