Hi Kim ~
My DH and I just bought new bikes and a new trailer a few weeks ago. We bought 18-gear mountain bikes from Wal Mart (nothing fancy), and a trailer (I think Huffy brand) from Pamida. If you don't have Pamida's in your area, it is the same as Target or even Walmart, I have seen these trailers at both those stores. The bikes cost us $50.00 a piece, and the trailer was on special for $100.00. We have a 5 1/2 yr old daughter, and a 2 1/2 yr old son. We pull them both. We also have lots of hills in our town, so we probably couldn't do it without the 18 gears, (I know I couldn't do it with 3), but if you are only pulling one child, and you have a pretty flat area to bike, then no problem.
I must say, the kids LOVE it, and it is awesome exercise for me and DH.
Almost forgot, the trailer we bought is a trailer/stroller, which is double-awesome. Since my kids still like to be strollered around, I couldn't do it without one of those jogger strollers that are big enough to fit them both, so when we bought the trailer, we bought the trailer/stroller all in one, to fit both needs.
Good luck!!