I agree with the rat suggestion. For a small caged pet that's portable, easy to take care of, interesting to watch, doesn't need expensive, specialized equipment and can be handled by children, you really can't beat a pair of rats. Hamsters and gerbils are cute, but in my experience they are much more prone to bite than rats. I would think birds of any kind would be more likely to cause problems with allergic children, since they flap their wings and spread dander far and wide.
