PS Vita Games for Kids ten and under

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Also can you do an ad-hoc type network between two of them for multiplayer games?

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Yes. Nearly all support Ad-Hoc.

10 and under friendly:
Ben 10: Galactic Racing (clearly only if they like the show)
Rayman Origins (like Mario)
Tales from Space: Mutant Blobs Attack! (cheap PSN game. It's 2d platformer that's super easy and fun to play)
All of the Sports games are generally easy for young kids to play (including Hot Shots golf, MLB: The Show, FIFA, Virtua Tennis, etc)
Little Deviants
Lumines (puzzle game)
LittleBigPlanet Vita
ModNation Racers (kart racing game with ability to create your racer, track, etc)

That's all I got with a little brainstorming. It really depends on each kid, because you have some kids who tend to be more mature and handle more difficult or more intricate games.