Spotted this cool mod on a recent trip to CA. This appears to be a Giant product, but I couldn't find much information about it other than some random pages. You can make any bike into a short Xtracycle for less than $50.
Giant bicycle kid carrier
It connects like a regular rack, but is well reinforced. There are also a set of BMX looking pegs for the passenger to keep their feet on. This is a really cool way to carry the kid without investing in a true long cycle ($$$).