lisa ,
I would be interested in the border terrier. I have a silky terrier named Angus. They are really good with children too. I had one when I was growing up so naturally I picked that breed for my kids. I think small dogs are threatened by small children because they are so small themselves and have to protect themselves. Angus is very tolerant of children but not of other dogs!
I am going to "look up" the border terrier to see if that would be a good match.