I would definitely get a dog from a shelter. I have had both pure breeds and mongrels and the mongrels have always won hands down in terms of temperament, trainability and lack of health problems. I would go to a shelter that gets a wide selection of breeds in (i.e: possibly not Battersea who seem to have a lot of certain types of breed) and ask their advice. I have had a couple of fabulous dogs from Pine Ridge dog sanctuary near Ascot. Also you will be making a dog who may not have had an ideal start in life VERY happy.

I would suggest you think very long and very hard, as it is like having another baby! I would also recommend that you get your puppy in the spring/summer as trying to housetrain a puppy during the soggy winter months is no fun (trust me!!). I spent a long time looking into breeds, and in the end went for a French Bulldog, as they are fairly small, don't need huge amounts of exercise, and we might get one bark from her a day when the postie comes.
If you are concerned about allergies then the x-poos might be the way to go! Have friends with a cockerpoo who is terrific. Look into maybe going to Discover Dogs run by Crufts as might be quite useful.
Lastly look into puppy classes, and perhaps ring them for advise before buying your pup as they'll be full of wisdom!

I've been looking into breeds too. Although my children are a bit older than yours (3 and 5), we're looking for a similar sort of dog to you. I grew up with a retriever and would love to have one but our house and garden are too small and anyway my husband has allergies (don't yet know about the children but they seem OK so far so touch wood!!). Given the fantastic temperament of labs and retrievers, I've been looking at miniature labradoodles (cross between lab and miniature poodle) which aren't as big as the pure breeds and have the added benefit of being less allergenic (particularly if you get an Flb generation animal).
While researching these crosses I've also come across cockerpoos and spoodles (cross between cocker spaniels and poodles) and the most gorgeous little dogs called shihpoos (cross between Shih Tzu and miniature poodle). Take a look at the following website if any of this sounds appealing http://www.poodogs.co.uk/ and let me know if you get one - I'd love to see them in the flesh!
Hazel.

I've had 2 cocker spaniels, a more loving, fun dog you couldn't wish for. All pedigree dogs come with their own glitches due to the nature of the beast, i.e, the pure bredness of them, and cockers can have bad ears. I had one who never had a days illness, or ear problem his whole life (apart from when he nearly killed himself eating something horrendous in the park - but that was self inflicted) and I've got one now who I probably have to take to the vet 2 or 3 times a year for antibiotics for funny ears.
Thats the bad bit. The good bit is they are just the most spectacular pets. I do remember when we were buying our first (a black and white) that we were warned off buying one of the honey coloured ones because they can be snappy - don't know what truth there is but I erred on the side of caution. Also, there are 2 types, show cockers, and working cockers. Out current one is a working cocker, took a lot longer to calm down from 'mad puppy' stage than the first on who was a show cocker. They tend to be more placid I think - but I also think working cockers have bags more personality. If he could have a wish granted it would be to be able to talk and sit up at the table with us at dinner, he really is a member of the family

Cocker spaniels are great! Smallish dogs that don't yap. Better size for most London homes - and great with children.

We grew up with retrievers, they are great family dogs and reasonably easy to train as they love to please their owners. Majority are placid and can put up with cuddles from overly loving children. But spend time researching their background and the breeders.

We are looking to get a puppy but are struggling to decide on which breed would best suit our needs? We have 2 under 2 (the eldest has grown up with Grandma's dog and knows how to behave with animals). We are looking for a breed who is happy to be at home all day with the family in a medium sized house with a small ish grass garden. Ideally we'd like as big a dog as would be fair for the animal considering the house. We plan to take it for 1 hour long walk a day and then other outings as and when we can - such as nursery runs next year. We're not looking for an endless barker or guard dog, more a companion. Allergy wise I tend to have a few problems but am a great believer that immersing yourself with the problem tends to eventually cure it. We understand that training is everything but would like to know which breeds would be best - everyone says Labs - is this really our only option? (DH and I have some experience of living with dogs but would mainly consider ourselves novices).