Oh heck yes. TIM is one of the ancestors of all the physics-based puzzle games we've been seeing lately. It's kid-friendly, but it's not just for kids.
I'm not sure how the difficulty curve holds up for adults, though. As a kid I remember it being pretty devious in the later levels, but I might not find it so challenging anymore. If someone were to ask me for a physics puzzler, though, TIM would be the first thing I'd think of.

A friend of mine has two kids, and some years ago he asked me to install old games on his computer, to see if it could interest them.
I gave him SNES9X with a bunch of games, and an Amiga emulator with also a bunch of games.
I was really surprised to see how much they have entertained themselves with all those old games.
Kids don't need ultra-realistic recent and expensive games, they are at the age where the imagination is still strong, cool 2D graphics are good enough.
The good thing is that they can appreciate a good old game without feeling nostalgia, it's old but still pretty new to them, and 2D games have graphic style, which miss terribly in 3D games.

I feel it is great since I played some of those games like Earthworm Jim 1 and 2. So it is a sort of nostalgic trip back down memory lane.

When 3D first became a part of gaming, yes, there was little graphical style. However, especially in recent years, we've seen all sorts of visually inspired games like Okami, Prince of Persia (the newest one), and Street Fighter IV. Developers have finally become used to working in three dimensions, and rather than strive to make the most technically impressive titles (though they also do that) they're starting to focus on the more artistic side of the medium.