Neville: Some incorrectly wear it as a scarf, mostly due to lack of education. I don’t believe anyone holds this is correct. There are some who wear it in a way where it wraps their back until their elbows – sort of like a large shawl. This may or may not have halachic footing.
As far as Sephardic custom – many boys begin wearing a Tallis around 2nd or 3rd grade (7-8 years old) – as they progress in learning to daven the entire Tefilah.
As a side point, Sephardic men generally rely on the Brocha of the Tallis Gadol to cover them on their Tallis Koton – possibly because there is a “Safek Brochos” on it. Children that don’t wear a Tallis yet, are generally trained to make a Brocha on their Tallis Koton – until they get older and wear a full size Tallis.