There's surely a middle way?
We were pretty easy going with our son (having been, with hindsight, over-strict with our daughter, which led to a somewhat troubled relationship), and when he started work, we never asked him for "keep". He was consequently not at all good with money. He didn't get into debt but he wasted a lot of money and didn't save at all.
He now has a good job and is a responsible and kind person who is good at managing his finances. However, it took a while and during that time a lot of money went down the drain. On reflection, I think it is better, if financially possible, to do what Gracesgran suggested - take some money for keep and save all or a percentage of it for them for when it is really needed.
Hollydaze I don't at all like the idea of chucking children out of their family home when they are 18. The people in question may well have turned out to be "successful" and capable, but I fear such a cold approach to parenting might result in pretty hard-hearted adults.