This thread strikes at the heart of why I, and many others want to rewrite the prequels. They have created a paradox wherein no method of watching them yields acceptable results. The OT takes a somewhat mature mind to fully appreciate, this much is generally agreed upon. Thus, watching the prequels at all during early childhood (clearly the target demographic) redefines the OT before it can be appreciated. However, the prequels are almost impossible to appreciate outside of childhood, except through nostalgia.
A catch 22, to be sure.
As for if I would let my kids watch the prequels, I wouldn't recommend them, nor would I ban them. It's just a few movies, after all. I will keep dreaming of a world where a rewritten Episode 1, 2, and 3 may be a better introduction to Star Wars than even the originals, and who knows, it may become a reality some day.