In reply to fxceltic:
I've been through a range of Islabikes for my kids. Whilst others have been on Dirt jumping styled bikes and 'full sussers' which may at first look fashionable, they are in fact inefficient and cumbersome. Fortunately now, Islabikes are much better styled and have more then the standard gray colour!
If you want your kids to love cycling and really progress, go Islabikes all the way,
If you want the cool factor, Scott, Trek and Specialized all do decent kids mountain bikes.
I think someone else has also suggested it but a decent bmx is just amazing fun, don't rule one out.