Thanks a lot for the tips. It's great to get your blessing, Firebird. We've decided to rent a car!
Nyororin, it's always nice to be able to talk to another mom-in-car in another country! I'm so relieved to know that driving in Kyoto wouldn't be that bad as we've suspected - you know, with 2 kids to drive around, I basically live in a car during the day!
And you're right, I still remember how we had to drag our daughter's stroller up and down the stairs in subway stations in Osaka 2 years ago! (We have a photo to prove it.)
Now I have a question - are there any popular sights in Kyoto that have parking far away from the main attraction area? We might have to avoid going there then.
Thanks again,
Katherine