You have to read this article in the New York Magazine it's so important. It appears that to praise a child for being intelligent (EG. "You must be smart at this!") has the reverse effect to what many parents and teachers believe to be the case.
That is, It doesn't encourage children and in fact, appears to have the opposite effect, particularly on gifted kids who underachieve.
What works so much better and does really encourage a child is to praise them on the effort they put in (EG. "Hey, you've put a lot of work into this!") Less pressure with this slant too, no doubt.
So then, kids prefer knowing that their individual efforts (which they can control) will have them eager to carry on and try new work (take risks) rather than knowing they have a natural intelligence (which they can't control).
Thanks so much to Vaughan over at MindHacks for finding and sharing this extremely helpful piece of info.