Watch Malcolm Gladwell's interview with Fareed Zakaria for his book "Outliers" (part 1:
http://www.youtube.com/watch?v=QCt1Wc8Kx4U, part 2:
http://www.youtube.com/watch?v=Nf3NalDYIT8).
In "Outliers" Malcolm explores what makes a person successful and asks the question, "Why do some talented people flame out early while others go on to brilliant careers?"
Malcolm's main premise is, "Success doesn't have much to do with talent. It's almost always a product of hard work and the culture of which we live our lives."
But I think Malcolm is really describing the development of genius and how the environment/culture either encourages or discourages people from focusing on a certain areas or ideas. Go the wrong way and you miss developing into your true potential.
From my perspective, genius is not so much measured by IQ, although a high IQ helps, but genius can be measured by how rare and valuable your perspective is and how effectively you see patterns in- and make associations or connections among disparate ideas. Paul Cooijmans has a similar perspective (http://www.paulcooijmans.com/genius/).
Developing these rare or unique perspectives usually takes deliberate and devoted focus on something (like when Malcolm talks about the 10,000-hour rule).
Einstein wasn't a genius because he was most skilled in math -- he wasn't -- Einstein became a genius because he relentlessly explored a problem, following it our farther than anyone had taken it before. This allowed him to see connections that no one had seen before, and these connections/discoveries were valuable to humanity.
So yes, praise kids for their effort -- it's one of the requisite components of genius.