I'm not a parent, but I think my brother and sister-in-law have done a pretty good job with my niece and nephew with "softly" setting some limits on how much time they spend playing (they each have DS lites now, and they play a lot of Guitar Hero, and a golf game I got them, on a PS2), and making sure they still get out and do outdoorsy things as a family (fishing, hiking, camping, etc.).
It seems like the key is being well-rounded. Most of the trouble I've seen is when parents use videogames as a "babysitter" for extended periods of time. If you're going to let a kid molt, and play 12 hours straight regularly, then, probably you're opening the door to addiction.
As an adult I've had certain games (Duke Nukem 3D, the first Diablo, and City of Heroes for a couple of years come to mind) where I probably was addicted, to the point I would be late to work, or I'd stay at home playing all weekend instead of going out. I try to watch myself on that a little more now.
As a teen in the 1980s, I definitely used arcade games (and Intellivision and handheld games - hey we had fewer choices then
) for "escape," usually I was just plain old lonely. I guess maybe that was an addiction, but I tend to look back and say gaming got me through a few tough years OK.