Not For Kids Only, the 1993 album from David Grisman and Jerry Garcia, is great idea for a kids' album. Two stellar musicians playing songs meant for singing along with, as the liner notes ask the listener to imagine hearing Grisman and Garcia playing songs after a large dinner gathering. (Can I be invited? I make a killer cranberry sauce.)
In execution, this album meets the standard set by the idea. Grisman's and Garcia's mandolin and guitar playing, respectively, are sharp and they're backed by a set of rotating sidemen playing assorted percussion or other instruments. The song selection is a nice mixture of songs well-known ("Freight Train," "Teddy Bears' Picnic") and not-so-well-known ("Three Men Went A-Hunting" or "When First Unto This Country"). The songs are given primarily (though not exclusively) bluegrass/folk treatments -- appropriate, of course, for the material at hand.
And despite all that, after repeatedly listens, the album itself is unlikely to make much of an impact on you or your family. It's just too... pleasant. There's no grit here, it's all so darn genial that while it'll make great "quiet time" music for lazy afternoons, there's little that will make you say, "listen to this!, my kids love this song!" Some of the songs, like the gently peppy "Hopalong Peter" or the slow Dixieland swing of "Teddy Bears' Picnic" do break out of the mold (and mood) of the rest of the album. But they're the exception, not the rule.
I think kids ages 3 through 7 are most likely to enjoy the CD. The album itself is so old there's no website for it (can you believe it? do those albums even exist anymore?), so find yourself your favorite online retailer for music samples.
I do want to make clear that Not For Kids Only is not a bad album. The musicianship is top-notch and the very idea that people should go ahead and sing for their own families is what inspired artists such as Dan Zanes. But it's not likely to be the first disk you or your kids reach for when you or they want to hear something that moves them.