Personally I'm against having children in the game. Not for any moral reasons. As has been stated they're only textures and 3d models, hardly anything to worry about! but for the reason that people are sometimes easily affected by what they see in the virtual world and will go and copy these things in the real world.
I doubt it would affect any more than perhaps one person ever, but that would happen, and that twat would go out and buy an uzi, kill kids and get confused when he doesn't see his "wanted level" displayed in mid-air. For that reason it isn't worth the risk. Killing adults is already an accepted thing in the computer game universe, so there's no point in claiming that we might as well take killing out completely, but children might cause problems.
Animals ont he other hand I have no problems with. And I don't see why the player shouldn't have his/her OWN kid. But killable kids in the street... no.