We've got three seating options that we use -- a peapod seat and stoker bar (little one in the peapod, big one in front with stoker), a custom roundabout seat (
http://www.flickr.com/photos/26572100@N05/4571881396/) and the bare snap deck with stoker bar and double handles (mentioned in about the middle of this blog post
http://familyride.wordpress.com/2011...p-burgerville/).
For a 1 and 3 year old, you'll definitely want at least one 5-point harness, and maybe two. So I'd go for one of the first two options, or with two peapods. Our only complaint with the peapod is that it takes up too much cargo space in the panniers -- that's why we ended up getting the roundabout. But the peapod is bigger and more enveloping and better for naps. The peapod we have is the old lte. The new one that xtracycle sells now (the yepp) might block the panniers less. It's higher up. But it still has pretty significant foot rests based on the photos. Our biggest cargo constraint was that we wanted to be able to tow a kids' bike (or two) while carrying both kids. That just barely works with our peapod.