After working for a vet for a year, and my sister for well over a decade, those "scary" breed dogs are often scary and "bad" because they attract very bad owners. I won't get into the 'born bad' argument, although remember that most pure breeds were actually bred for certain characteristics. Most people I ran into who went for the "scary" breeds wanted them to scare people with. The worst case of cruelty I ran into was done to a rottweiler. Many of these dogs get staked out in the yard with a bowl of water and one of food, and just left there all day, ostsensibly to guard the house. That bowl of water gets kicked over early in the day, too bad for fido. This in the Florida and Hawaii heat. Lots of people get them to scare off cops in case of a drug bust. Needless to say this is absolutely NOT the dogs' fault; that would turn me mean for sure! I know people who love these breeds and have gentle pets. But watch out for the real reason that animal is in the pound. I've also known a lot of these breeds to wind up in the pound because Daddy/Boyfriend was discipllning a child that dog was trained to protect. It doesn't take a genious to figure out where that went.
As everyone said, labs, retrievers and boxers have reps for being great with kids -- but most are not small. Not only do terriers tend to "yappiness" but remember hounds are bread to howl and can keep it up 24/7, even in a case I ran into, a basset mix, in his sleep. Makes terrier yapping seem mild! Your neighbors would probably prefer the yapping to that constant baying.
When you decide on a breed, consider contacting a rescue society. And I agree w/everyone that a little mutt in the mix helps smooth out the negative tendencies of the breed.
I like short hair, ears, and tails for a kids' first dog. No matter how kind you train your kids to be with dogs, especially young kids, those wind up being pulled.
In the terrier category, the West Highland and Scotties seem to be the least yappy and most mellow. I have Jack Russell Mutts, and when we bred ours (upon request)(I wouldn't do it again) I specifically told all the senior citizens and those with babies "NO". Too much energy. The people who bought them had older kids or were childless couples.
I don't mean to insult anyone, but remember if you buy one of the most intelligent breeds that (a) you have to be smarter than the dog and (b) you need lots of time to train the dog and put that intelligence to work for good. If not, it WILL get bored and get in trouble every time you aren't looking, finding imaginative ways to destroy your home. I knew of an Australian Shepherd who could get past all the childproofing in the house when everyone was at work. Nothing was safe from chewing, eating, etc.