Thank you for that information. There are two breeds that come to mind which are easily trained friendly personality, and good with kids and other animals and they would be the Bichon Frise ( a low shedder also) and a Shih Tzu. Both are pretty hardy dogs as well compared to other smaller dogs. Some of the hybrids with this mixture in them are just as good but you are going to pay a lot for something that is really at this time considered a mutt. I would stay away from anything that has Cocker spaniel in it such as the cockapoo which is very popular, but Cockers have been over bred and the personality can't be relied upon.

Bichon http://www.akc.org/breeds/bichon_frise/index.cfm

shih Tzu http://www.akc.org/breeds/shih_tzu/index.cfm

Well, shelties have a herding tendency so being around other animals or children could send it into herding mode, and when herding mode is not taught then it can cross the line into prey mode. Pugs are cute, but seem to have many problems especially because of their pushed in faces, also red mange. The Caviler king Charles have a tendency to get epilepsy or fly catchers syndrome a form of epilepsy.

I was thinking ahead to a dog with a good personality because I assume your children will have friends coming and going.