This is the advice I give to everyone on buying a machine to get your kids started sewing:

We have gone cheap, only to end up spending more in the long run, because the machine doesn't last long or it causes too much frustration. You should plan to spend around $60-100 on an adult machine (I have yet to find a children's machine that is truly reliable). You need to look at this as an investment. A machine that will allow your children to sew whatever they want, whenever they want, and for many years.

The machine I got my daughter, when she started sewing (at age 3) cost around $70 from Walmart. At the time my 6 yr. old and I shared the one my husband bought me. I couldn't imagine letting my 3 year old sew on it, in fear that she would ruin it!

You don't need fancy stitches, starting off all you need is a straight stitch and zigzag. You also want some choices with the width and length of stitches. A reverse option is important, as well. I have seen some new models, that are reasonably priced that have a speed control on the pedal (this is really great for young kids - but not necessary).