1st of all 1 hour practices are enough for this age group.
2nd - involve the parents so you don't have any groups bigger than 3 (that way they are either taking a turn, next for turn, or just finished a turn).
Use equipment that doesn't cause fear, no 'real' baseballs.
Wiffle balls, and ragballs work for me.
(I make ragballs out of old socks and electrical tape).
I always try to teach a skill, then use it in a game (not a 'baseball' game).
ex; throwing technique, throw to a partner, make corrections;
then play a game of Battle Ball - 1 team on left, 1 on right; try to get all the balls on the other teams side. Gives everyone lots of chance to practice throwing without anyone being singled out.
I benefited from the NYSCA (National Youth Sports Coaches Assoc.) coaches clinic. Check it out if you can. Good luck.

wiffle ball wiffle ball wiffle ball! just teach them the basics! level swings! no scooping! just because the ball went high into the air doesn't mean we'll win the ball game! lol. fun times! thanks for teaching the game to our kids!

Hi Jason. You can pick up some pointers under the "beginner" area of the baseball skills and drills section on Weplay (http://www.weplay.com/youth-baseball/drills/skills/beginner)

The best is teeballusa.org. They've got a great drills and games section here:
http://www.teeballusa.org/DrillsGames.asp
Each one of these drills is a time-tested, proven successful way to teach the basics.
Good luck! T.J.

I wish someone had told me about the "battle ball" that Laurie mentioned, that sounds like an excellent tool. I just muttled my way through. I would say this, in my 2 years of coaching t-ball with a record of 22-1, we kept score, I didn't "dumb-down" the game too much, AND I had a higher expectation level than the other coaches did by far. They played up to where they were expected to for the most part, and they liked to win which helped.
Having the parent/s on the practice field, at least in the beginning, helped a lot too. I explained what we were doing to the kids and the parents made sure that their kid did it correctly.
I also had my kids playing the same position for MUCH longer than the other coaches. My feeling was that they needed to be comfortable at one position, play it well, THEN move to another and try to master that one. The other coaches had them at one place one game and another the following game.

Have fun, good luck in the future.