DS - thanks. Good detail and ideas. So far we've got the Red Box, Dungeon Master's Kit, and we just subscribed to DDI.
With other activities and school we haven't had too much D&D time lately, but the kids love everything to do with D&D - I'm enjoying it too. Though, as you say, there is much to learn. I imagine there's a point when kids realize that dad doesn't know everything... In fact, dad knows very little. When my kids grow up and look back I'm sure this D&D time will be that realization moment for them (grin).
We've actually been using playmobil figures as our minis as they can hold little interchangeable daggers, or swords, or bow and arrows, or whatever. I think they are too big, but the kids don't seem to mind so all is good so far.
Dad to D&D Boys