Wow.
Paul, you clearly showed how religion can be a key ingredient to a whole host of problems. Sadly, this is not the first time I have heard a story like this. I have a friend who basically shared my values, but would never go to church with me because it caused her to have panic attacks. Another friend avoids church because during a bi-polar break she talked to God in a way that was not healthy at all.
Enknot, I would love to hear more of your story--maybe over coffee instead of through the internets, that way we don't have to worry about what other people might read. At the very least, maybe I can help you find the Bible stories that you wish to find. Probably the best story to teach honesty is the story of Annias and Saphira, who lied to the apostles and were struck dead, but that's not exactly the kind of thing we want to share with kids.
One of my favorite theologians once said, "You know we've gone and messed up Christianity when we started thinking it's someihing good for our kids."
I think what he meant by that is that the Bible isn't really the best way to get kids to grow up in the way that the American dream teaches people to grow up. To "succeed" in the the US, you have to go along with the ways and values of our empire. But Christ taught a way of life that values entirely different things. So Christians are called to love justice, and to find it, not through violence, but through love. When we seek justice instead of power and accolades and stuff, the ways of the empire seem insignificant. But the whole world lives according to the ways of the empire--this is why Jesus and so many of the first Christians were killed.
Do you want to raise a kid to believe something so radical and dangerous? I think it is a fair question, and because of it, it is important that parents think twice before they baptize their kid.
On the other hand, if this new way of living is good and better (and I obviously believe that it is) then it is worth sharing with your kids. And while I appreciate the sentiment of waiting until they are old enough to choose, remember that not everyone else will wait. If your kid watches tv, they are going to be hit with thousands of images that tell them that stuff will make them happy. If they grow up in the U.S., the news will show them that the way to peace and security is through violence (or the threat of it). If they play video games, they will learn that consequences aren't real--a simple reset button will let them start over easily (and while I love video games, I have found that this is not the case in real life. For all the cops I might shoot in Grand Theft Auto, I would only get the chance to shoot one in real life--note: I have not and will not shoot cops, this is just an example

)
I guess what I am saying is that if you want if you want your kids to be different than the average kid (and I think the average kid is messed up), than you have to work on him/her from the start. Yes, it can have bad effects (see Paul's post), but so can doing nothing.
I wish I had more time these upcoming days to explore this further. I think I will be away from a computer until Wednesday night, but if I can get a hold of a laptop, I will check in. Until then, please forgive any lack of further response.
And I promise I will never quote Crosby, Stills, Nash and Young again.