CBS News Correspondent Kimberly Dozier reports the park makes a fitting tribute to Diana's memory, coming as it did on what would have been her 39th birthday. She was a kindergarten teacher before she became princess.
Actors from the Bridge Lane Theatre Company portraying the legendary Peter and his arch-enemy Captain Hook were the star attractions, dueling through the on-off rain to the delight of a very patient, very young audience that included many children with physical and mental disabilities.
"She had a lot of child in her, and she kept in touch with that aspect of herself," said Rosa Monckton, a friend of Diana whose daughter, Domenica Monckton, Diana's goddaughter, opened the dedication ceremony.
"I open this garden for godmother Diana," said five-year-old Domenica, who has Down's Syndrome.
Britain's finance minister, Chancellor of the Exchequer Gordon Brown, opened a Diana memorial walk-way through London's parks at the ceremony, which took place near Diana's former Kensington Palace home.
The royal family, however, did not attend.
Charles was out of town Friday for an official engagement, and Queen Elizabeth II and husband Prince Philip were in Scotland for a week of engagements, Buckingham Palace said.
Diana's sons, William and Harry, had chosen not to attend for personal reasons, according to St. James's Palace, where Charles has his offices.
But commentators have branded it a snub to the memorial and a bid by Charles to distance himself from the memory of Diana so that he can promote his long-term lover Camilla Parker Bowles.
Princess Diana's brother, known for his verbal duels with the palace, was diplomatic.
"Honestly, anybody who wanted to attend could attend, and that's fine," said Earl Spencer.
Monckton was less forgiving.
"It's sad that no member of the royal family is here," she said. "But I don't want anything to detract from today because this is such a perfect memorial to Diana."
The $2.5 million playground in Kensington Gardens features a Peter Pan theme, because J.M. Barrie, creator of the classic children's story, funded a playground on the site in 1906.
The new playground has six play areas, including a sculpted water feature called the Mermaid's Fountain and a Wigwam Camp with totem poles and tepees.
The $1.9 million memorial walk is charted by 89 plaques marking a seven-mile route through Kensington Gardens, Hyde Park, Green Park and St. James's Park.
Embedded in the ground, the plaques highlight buildings and locations associated with Diana, including Kensington Palace; Buckingham Palace; St. James's Palace, where she once shared an office with Prince Charles; and Spencer House, her famiy's one-time London home.
Diana Frances Spencer was born in 1961 and married Prince Charles in 1981. The couple were separated in 1992 and divorced in 1996. Diana, her boyfriend Dodi al Fayed and his driver, Henri Paul, were killed in an automobile accident in August 1997.