Re: Teaching in the times of lawsuit.
At my dojo, there has been a children's class since my sensei first started it 12 years ago, and to my knowledge, he has never had a problem with parents getting hysterical over anything. The most important thing is to get the parents involved. Some of the adult students also have kids in the children's class, and they come to those classes too to help instruct. There are also always parents off to the side watching, and they no not to interfere with the class if they aren't on the mats training.
Having a children's class is a great thing for a dojo, because it not only brings children who stick with the program up into the adult's class as they grow up, but it also gets some parents into the adult's class as well, and gives the adult students an opportunity to teach. Aikido and other martial arts are also a great thing for kids to get involved in, and is a wonderful thing to offer to the community.