L.S.
I love the idea, but I suggest that you organize the painting. If they just go at it, you may have a bigger mess than you are prepared for, and given a 4 year-old's attention span, the activity may not last as long as you like. Maybe you could have them listen and paint a story. For instance, if your son has a favorite book you could use that as a base for a really cool activity. Before the party, paint a very basic backdrop. If the story is Dr. Seuss, for instance, you could paint a Seuss-like plain background, just an outline. If there is a story set in a forest, paint a few trees on the wall. Then when the guests arrive, have them wear shower caps and protective covering, and read the story. After each page, they can add something they heard to the scene. Provide sponges in shapes related to the story, paintbrushes, or other things to help them illustrate the story. Just read a page at the time, and as they paint, you can talk about the story and the things that they are adding to the illustration. When you get to the end of the book, you should have a lovely scene showing the story. Take a picture of the children in front of the wall when it's done, and send them home with a print, or send the picture later with a thank-you note. Perhaps, if the book you use isn't too expensive, you could give each child his or her own copy of the book as a party favor, rather than doing a goody bag. Doing something like this would help you keep the painting under control, stimulate their imaginations, teach them a bit of cooperation as they work on the picture together, and help you to keep everyone's interest and participation going along at the same pace.
Have fun!