Introducing New Players to D&D

I've been asked to run a D&D game for some kids I know. At first I was planning to run a game using the Pathfinder rules, but then it occurred to me that these kids knew nothing about pen and paper RPG games. I also considered using old-school AD&D, which is even less user-friendly and I don't have enough books to go around.

The dilemma I now face is this: How to give new players a good intro to the world of RPGs without inundating them with a bunch of complex rules?


Rules
First and foremost, what kind of rules should I use? The rules need to be fairly consistent, reasonably simple and allow for creative problem-solving.

Here's what I've come up with so far....
1. Use the well-worn mechanic of d20 + modifiers for task resolution. It is THE industry standard and can be applied to other systems if the kids become interested in exploring them.
2. Use the standard character creation/race/class rules from Pathfinder. Again, this is an industry standard thing. I also like it because Pathfinder has been kind to low-level characters without making them overpowered; each class gets a couple of cool abilities at first level, but nothing ridiculous.
3. Omit the OGL Feats and Skills in favor of self-determined professions or Secondary Skills. Don't get me wrong, these are great things, but I'm choosing to reserve them for higher-level play. Knocking out Feats and Skills from character creation lets the kids focus on paying attention to what's happening at the table and seek creative ways of resolving difficult situations. "You're an ex-teamster" opens up a lot more avenues of character development than "you are +1 to hit with your longsword and get +4 on your Intimidate skill".
4. Do the same for monsters. Except for special attacks that are integral to the monster, of course.
5. Ad Hoc XPs - advance the characters based on the number of encounters/scenarios they have successfully resolved. Again, less bookkeeping results in more free-form play time!


Setting
I'm still not quite sure what I want to do here, so I should probably try to get a feel for what sort of game they might enjoy. Their mom is on-board with the program, so perhaps I can get some useful data from her as far as what kind of books/movies they like, and so on. Like all of my campaigns it will probably be a home brew setting into which I will inject published material as I see fit.

The Game Plan
However the setting and plot develops, I've got a skeleton plan for how I would like things to go, assuming the kids like the way D&D plays.

Part 1: Character development. Rolling up characters, explaining the basic mechanics of the game, dice, and putting them into play. Letting them explore the setting a bit with minor challenges to get used to the mechanics and build the world out a bit. This should comprise most of the 1st level play and extend across 1-2 game sessions, depending on how quickly they pick up the rules.

Part 2: Advancing to 2nd level. By now the kids should have a game or two under their belts and should be ready for 2nd level. Learn about advancing a character in level(s). Rolling hit points (every player's FAVORITE thing to do when going up levels)! Possibly introduce Skills. Or not. Acquiring new spells, new equipment, and getting back out into the world.

Part 3: Advancing to 3rd level: I think at this point I'll introduce Feats. At 3rd level, pretty much everyone gets a feat and should have some idea what they want to do with their character. Second level spells! Bigger, badder monsters!

I expect this should keep things moving for the first couple months, depending on how often we play.

I'm really looking forward to this!