It's called Scratch. Designed at MIT, it allows you to graphically program sprites, for producing games, animations, simulations, etc. It's really awesome. You can play the various creations people have made in this, at the MIT webpages for it. It's really kinda like flash, but much simpler, and it's free to download and install on your own computer. To play the creations though you need to either play them in the Scratch software itself, or upload them to the MIT website (which allows others to play them then too). Unlike Flash, there is no "browser plugin" that you can download that lets you embed them in web pages for everybody to play who visits your own website (at least none that I could find on the MIT pages for this software). There's two versions, 1.4, and 2.0. To download version 1.4, go to http://scratch.mit.edu/scratch_1.4/ and select your OS (Windows, Mac, or Linux).
Version 2.0 is platform independent. This is because it runs on the Adobe Air framework. For version 2.0 though you will need to download and install the correct version of Adobe Air for your system. To download the Installer for version 2.0, go to http://scratch.mit.edu/scratch2download/ and click on the link that says "Scratch 2.0 installer".