I have two dogs, Apollo (my big baby) and Zeus, who is a medium size but you'll never convince him of it.
My sons are 8 and 6. They love having the boy-os (dogs) in their lives. I don't think you could seperate them for anything. I think having the two pups helps, as then the kids don't feel the need to "compete" for a single dog's attention. (They're boys,
everything's a competition!) My eldest loves to hang out and explore the woods with Apollo, and my youngest lives to throw the ball for Zeus to chase. They naturally picked out their own pecking order.
We also have two cats, they love the kids as well. Stitch thinks he's just another dog, so his mannerisms are the same as the boy-os. Mysti disdains us all, and allows us into her universe only to worship her.
We're actually contemplating adding another fur-kid this winter. The two boys want to enter 4-H next year, so we're tossing about adding another pup, or a goat. (My husband's praying that a goat will eat the blackberry bushes that are invading!) 4-H recognizes all manner of critters for their programs, so in the end, we'll probably let the kids decide.
I heartly encourage you to add another pup to your home. The kids will love the cuteness of the puppy stage, and the dog can grow with your children, giving them a bond that will last all their lives.