This *is* a good topic... just because it's so complex and none of us can seem to find the perfect answers.
To address Ferrus just for a moment on something, while I think we could lump religion into an alogical category (because it's usually "revelation-based" rather than derived from observation), I do think we need small gradiations. I would not say Christianity is as illogical as some other faith systems I've seen... which is one reason why Christianity grew so quickly, then lasted so long, and still dominates in some parts of the world. It's not ALL about a dominating institution, there are parts of the faith that very much seem to gel with what good life and good relationships are... So again, gradiation is important if you plan to start weighing and evaluating religions.
As far as the faith of my children, yes, there is a problem with C and me, and we both are trying very hard to be sensitive to each other. She believes strongly; I am agnostic as strongly, although I want to believe.
She states what her beliefs are with conviction but allows other points of view to be heard... and I think the most important thing is that she does not pretend to be a scientific or similar view -- she is very fine and open with the notion that this is what she believes to be true, it's all a personal choice for her to believe. Because to her it's real.
Meanwhile, I just tell my children never to be afraid to question their own beliefs. In life, many people will want to tell them that something is true, but whatever "faith" they have, it has got to be theirs and no one else's, or they will not ultimately be able to live by it. It just won't work for them. They have to firmly believe in what they are doing. So I teach them to evaluate, question, and individuate.
I do look at my children. The eldest is not sure about God, although he believes more than he did. The younger two DO believe and have made commitments to God, and their behavior improves relationally when they are remembering that commitment. Yes, whether the Bible events are true or not is one issue; but at least in terms of setting a positive guiding force for themselves, my children do not have to believe that the Flood was literal or evolution is false or Revelation is post-tribulation in order to grab the core of the faith and mature as human beings and become better people.
Do you recall Wittgenstein's ladder? It's something used to ascend to the next level, you NEED the ladder, but once you climb it, you no longer need it because you've incorporated it / been transformed by it. I think sometimes the specifics of religious faiths can be that way as well.