Recorders are great, xylophone is also quite great. Aw, the little guitar sounds adorable, I'd also suggest getting a keyboard. (a little kiddie one that is)

Pianos are the best. I don't know if you have a piano or if it would be much too pricey for you, but it's a great instrument to bring families together. (I would suggest looking for someone who is looking to get rid of their old piano and fixing it up) Singing carols during the holidays, having your children learn on it and whatnot. When I was a kid, some of my fondest memories were dancing around to my mother playing classical music on the piano. I also tinkered with the piano keys trying to write my own music, I learned how to play on it. There's just something communal about it, I also find that children are utterly fascinated by pianos for some reason.