Updated December 14th: read my full review of Sonic Unleashed here

Sum up:
Sonic Unleashed gets back to the basics, and although there'll be an overworld where you can explore, converse with characters and engage in a variety of side-quests, it's entirely optional. Instead, the main focus is on the speedy, roller-coaster-like levels that play out in a 2D/3D perspective (it switches between), while collecting rings, fighting enemies and dodging obstacles.

This games also has a day and night cycle, and when it turns night, Sonic will transform into a "Werehog." These levels constitute about 40% of the game, and will concentrate more on fighting than platforming. Sonic's Werehog form can smash objects and enemies with its enhanced strength, and use its stretchy arms to reach high places and use special attacks on enemies.

Recommended age:
The ESRB rated this game "E10+" for Everyone 10+, listing "Animated Blood" and "Fantasy Violence." The "Animated Blood" will either consist of colorful firework-like particle effects and/or a gooey/slimy consistency of some of the enemies--there won't be any red-colored blood effects.

The "Fantasy Violence" will consist of Sonic hitting non-human enemies with his body, his Werehog form tearing up levels and enemies with his super strength, and there might be some explosions, etc. So overall, this game is quite mild, but Sonic games have always been challenging (and a bit frustrating), and this one is no exception, meaning many of the gameplay mechanics could be too difficult for kids 7-. So I'd have to recommend this game (difficulty-wise) for ages 10+--however, if your 7 year-old is good at (and likes) Sonic games, then let 'em try.