[Al Skierkiewicz]

Fisher Price motors are notorious for producing "brush noise" which is in effect RF noise. Try separating the servo cable from the power wiring for the motors. If they must cross do so at right angles. Robot rules allow you to add some filtering to the motor and the servo lines.

<R69> A signal filter may be wired across motor leads or PWM leads. For the purposes of inspection and rules compliance, such filters will not be considered custom circuits, and will not be considered a violation of Rule <R54> or Rule <R68>. Acceptable signal filters are:
• A one microfarad (1 μF) or less non-polarized capacitor may be applied across the power leads of any motor on your ROBOT (as close to the actual motor leads as reasonably possible)
• A resistor may be used as a shunt resistor for the PWM control signal feeding a servo.

I would recommend a good quality 0.1 microfarad capacitor across the terminals of the motor rated for at least 100 volts. I would also suggest making the servo cable as short as possible. Radio Shack has a variety of ferrite cores that can be placed on the servo cable that may help as well.