Traveling in London as a family may seem overwhelming but it's actually quite managable.  There are many museums that are free so you can try out many different places without feeling obliged to spend a certain amount of time to get your money's worth. Also, family discounts on public transportation are very good. 

Art Galleries

London has an extraordinary range of art galleries.  Both Tate art galleries, (Tate and Tate Modern) The Royal Academy, The National and the National Portrait Gallery have marvellous collections and especially in the summer have exhibits which are suited to families. 

They all have easy to navigate websites with maps and directions.  There are always special exhibitions - which have to pre-booked and paid for but the booking and payment can be done securely by credit card before arriving in London   

Museums 

In the Kensington area, there are three museums close together that have appeal for people of all ages. The Victoria and Albert museum is listed as a museum of "decorative arts" but don't let that dissuade you, they often have craft activities for children that are free and there's so much visual stimulation children will be well entertained (compared to the other 2 museums next door the V&A can be surprisingly quiet!). The Science Museum and Natural History Museum are right next door and are must see attractions for any visitor to London! 

Upon entry, always check at the information desk for on-going children's activities.Try other types of museums as well, the National Portrait Gallery, the British Museum and the Museum of London all kept children ages 3-13 entertained and interested for hours on a recent visit.  In general, children allowed to explore at their own pace (without running or touching the art work, of course) will find plenty to keep them busy.  Carry a list of the free museums and consider making a dash for the nearest one sometime when everyone is ready for a change of pace.

If your kids are older and partial to the macabre, you may (repeat, MAY) want to let them explore the horrors of the London Dungeon, on Tooley Street near the London Bridge rail station. This bizarre and scary attraction is certainly not cheap -- 14 pounds for children, 18 pounds for adults -- but it is quite well done, pays a lot of attention to detail, and is definitely not for the faint of heart.

The cost of these attractions is very high certainly, and if you are going to be spending a few days in Town it pays to check out what the family can do that is not only interesting or educational but also free! This page has a FREE attractions lists.

Transport 

Payment for all London Transport services within the M25 greater London area is much cheaper by Oyster Cards. They are prepay cards which are swiped over a terminal on buses or when entering and leaving the automatic barriers at underground stations.  If you do not swipe your card at both gates on the underground, you will be charged the maximum fare which is now L.4 per ride!

Perhaps the hardest part for children is the walking to and from sites so plan to use public transportation as much as possible, to save everyone's energy for the good stuff.  Children under 14 travel free on city buses at all times, so consider buying a day bus pass for the adults and be prepared to jump on a bus anytime throughout the day.  The kids especially love riding on the upper deck and its a great way to see the city.  Get a good bus system map so you can figure out where you're going, then try to be spontaneous and take a ride on the next bus that comes along.  The buses do take longer than the tube in general but if you consider it part of your site seeing experience it won't feel like wasted time.

As of 1 April, 2007, children under 14 ride free on the Underground at all times - they just need to be let through the turnstiles by a staff member, one of whom is always at the entrance/turnstile area.

By using an Oyster card you automatically get a cheaper deal than when paying by cash and if travelling more than once at offpeak times it automatically reverts to the price of a daily travel card.  Look at the leaflet at underground stations or on the London transport website.

One of the great things about London is that central London is actually quite compact. You can take in the Westminster Abbey, stroll past Big Ben, fight your way past the queues outside the London Aquarium and the London Eye and have a pleasant stroll down the Southbank before crossing again at Tower Bridge and taking in the Tower of London. All quite doable in a day! 

Restaurants 

While restaurants are generally rather expensive there are some great options for quick meals with the kids. Wagamamma's is a chain of noodle houses that are geared for seating larger groups - you can place an initial order and then if people are still hungry, order a few more dishes.  Try ethnic restaurants too, in an Indian restaurant (some of the best Indian restaurants in the world can be found in England!) consider ordering mild curries and extra sides of rice for the kids.  Another easy food option are the many convenience type stores that carry premade sandwiches.  Benjys specializes in sandwiches both premade, and made to order, there are several menu items for under 2 GBP. 

In good weather consider grabbing a selection of sandwiches, snacks and fruit from one of the convenience stores and have a picnic.In general, London is a very kid-friendly city, with lots of options for families.  Just do some pre-planning, know where the free things are and be flexible with the schedule.  Remember that nothing is an absolute Must-See, because if you don't do it this trip, you'll have an excuse to come back again some day.

Another option you might want to consider is having a pub lunch. A good pub in England is a VERY GOOD PUB while a rubbish pub is very rubbish! One of the best pubs in Central London is the White Horse on Whitehall near Horseguards parade. Its also child friendly and has a nice quiet dining area on the second floor. Before you do enter a pub with children you need to ensure it is child friendly, just walk in and ask the bar staff and they will let you know.

Pubs are about as close as England comes to having a half decent cafe culture! :) 

Theatre 

If London is the home of the performing arts in England then the West End is the main lounge!

There are so many theatres in London that the choice can be overwhelming. However for the best deals for a family you need to go down to Leicester Square on the day you want to go to the theatre and see what is available. A typical family of 4 can save around £100 or more off full price tickets! But remember, there are no kids prices in the West End! Children will pay exactly the same as the adults if you want to go to a show. Please use the official TKTS booth and avoid the several booths dotted around the square and in nearby Cranbourn Street - They may offer half price tickets but they will be the worst seats and you could get stung with a hefty booking fee.

Thankfully though there are excellent websites like lastminute.com where you can get tickets for as little as £10 a person for a show and when you get to the theatre you can find yourself sitting in prime seats! The flip side is you can find yourself in the standing only area of the Royal Albert Hall so its best to check where the seats are before you finalise your purchase.

A show that kids will absolutely love (and adults too) is Stomp!

As said above, your best bet is to get down to the official TKTS outlets at Leicester Square (The booth is located in a chalet like building to the south side of the square) and Canary Wharf (the ticket office there is up on the DLR platform) and see whats available. Generally you can get the best seats in the house for half price (around £20-25) on the day. 

Parks

London is a paradise of parks! For such a large city London is practically overflowing with greenspaces, from the majesty of Hyde Park right through to small village greens such as Bexleyheath you wont be disappointed!

If you have a day to kill and its sunny and warm then head for St James Park for a stroll through to Buckingham Palace and then through Green Park before continuing on to Hyde Park and the memorial playground in Kensington Gardens (it may come as a surprise when you realise Hyde Park isnt actually all Hyde Park).

Then there is Regent Park which has the London Zoo and also Primose Hill which is actually a hill (unlike many of places that carries the moniker of hill in their name) and has lovely views over London.

This is a very brief list of parks in London but do check on google or other tourist sites for other parks. London parks are well worth getting out to for a day in the sun. 

Activities

The Tower of London is rich with history, but also full of sights that will keep children entertained.  England's crown jewels are kept here, as well as an impressive collection of armor and weaponry.  However, much of the Tower's history is steeped in violence, and may prove too much for very young children to handle.  Older children may enjoy attending the Ceremony of the Keys, which has taken place each night at the Tower for the past 700 years.  You must apply months in advance for tickets to the Ceremony, and less than 20 tickets are available for each night.  Although it's not an event you can attend on a whim, the intimate setting is a wonderful way for children to understand and experience the continuity of London history.

The Original London Walks have some great trips for families. You can even arrange for your own private tour.

Shopping

When it comes to shopping, London has some of the best Shops and Shopping Districts in the World.  Seeing that the whole family will be browsing and shopping, you might as well visit a Toy Shop in London. One of the Greatest Toy Shops in the World has to be Hamleys!

This Toy store is enormous and you could probably get lost in there or spend a whole day just browsing.  Mum and Dad really shouldn't worry about getting bored in here.  You will be able to find something to please every member of the family.

Smyths Toys is also a fantastic toy shop on London and all over the UK and Ireland.  They yhave a huge selection of toys, games and gadgets for young and old.  Best of all is that Smyths Toys' prices are much more reasonable, so you'll probably be able to stop the crying and nagging by actually buying something for your kids.

This is truly a great stop on your travels through the big City and well worth it!

Conclusion 

The main thing to remember when travelling with small children is not to rush around at 100 miles an hour! This will very quickly lead to you having grumpy children and even grumpier grown ups. Remember, its their holiday too. You will soon realise that if you take things slowly you end up enjoying your time away as a family more.