My daughters are 7 and 4, and we have two (quite large) greyhounds. They're retired racers, so we didn't have to worry about the frustrating and time-consuming puppy stages (potty training, teething, leash training, etc.)
Our first one died when our oldest was about 6 months old, and he was FABULOUS with her. http://www.frensley.org/Family/2003/December-2003/1658120...
One of our current dogs was here when I got pregnant with her. He was TERRIFIED of children until I had her, and he realized pretty quickly that kids really aren't that bad (they drop food on the floor, and now dress him up and make him do tricks - he's perfectly happy, since the treats keep coming).
The last one we adopted is a big ol' lug. He's perfectly content to be used as a pillow, and I have a picture of him last week, covered in kids in my 4-year old's preschool class.
The point is - we're a dog kinda family. We had dogs before kids, and the kids have been raised right along side them. We've taught our children from the beginning to respect and be gentle with them, to give them their space, and to NOT leave doors open, so they won't run away (this comes in handy, so the kids won't run out, either). We've also taught our children that not all animals (not just dogs) are as friendly and gentle as ours are. Many adults have been impressed, that my girls always ask before touching, and are always incredibly gentle with animals. . . and I think their lives are better for having animals around.
M.