I have yet to hear anything good about the Colorado. It uses a 5-cylinder engine that's supposed to be a dog and gets horrible gas mileage. [YMMV, this is just hearsay from the few people I know that have 'em.]
I strongly reccomend the new Tacoma CC. Far superior to the Colorado in every respect...although it is more expensive, it's worth it if you plan on keeping it.
I myself have an '03 Taco, x-cab, TRD 4x4 and it has been the best truck I've ever owned bar none [and I've owned 'em all at one point].
A good friend just bought an '06 CC Taco, and let me tell you, it is the cat's ass. 245 horses/21 mpg in the city [according to him]. Much improved over the last model, and that's saying something. Bigger, too...almost as big as the current Tundra, in fact, so it should serve you well with the kiddos.
HTH