Sightseeing buses are boring for 10-year-olds. They're also expensive.
A short river trip might be a better (and far cheaper) idea. Don't use the expensive tour boats; just use the normal river bus service. (A crew member usually acts a free tour guide anyway although, of course, you'll be pressed for a tip at the end of the journey). Tower Pier to the London Eye Pier is only a quick trip but it takes in loads of sights:
http://www.tfl.gov.uk/modalpages/15544.aspx
Most kids won't recognise many of the people portrayed in Madame Tussaud's. (It's also ridiculously expensive).
As has been said, the best museum for youngsters is undoubtedly the Science Museum but the Natural History Museum also has a great deal to offer (especially the roaring dinosaur!). If you're selective about what you choose to see, the V&A also has some exhibits which might be of interest (particularly in relation to the history of fashion).
Covent Garden will be packed with lots of free street entertainers. It's a very 'family friendly' area.
Chris