Walking is good exercise if you can put them both into a stroller and go for a long walk once a day. There are also Mom's groups that get together to do stroller cardio workouts.
Yoga is excellent for weight-loss, as is Pilates, and you can get a tape or DVD to do at home. Try when your daughter is napping and put your son in a swinging chair to entertain him.
There are a lot of good diets and bad diets out there. I'm trhing Dr. Abravanel's Body Type Diet and Lifetime Nutrition Plan. It is very balanced and easy, and not severe like some of the ones where you have to give up an entire food group.
Two friends of mine lost 18 and 24 lbs. using Weight Watchers meetings. They said that the interaction with others was irritating, but really motivated them. There are also online diets that are helpful, but not as good as having someone to account to.
It seems like eating fresh veggies (not from cans) and less of meats, cheeses, etc. is the best way to flush toxins, get the most nutrition from your food, and reduce your cravings, although it takes a week or two to get rid of the cravings entirely. Real food is best in any circumstance.
I'm still battling my 30 extra pounds, but the more veggies I eat, and the more Yoga I do, the less stress I have in my life, the better my moods with my son, and the stronger and healthier I feel. A lot of it is emotional, and you have to want to lose weight for yourself and nobody else.
Good Luck!!!!!!!!!