We spent the Memorial Day holiday in Panama.  This is not a bad place to travel with kids.  Pretty much every migratory bird comes through the isthmus (and you get to listen to your kids say "isthmus" for hours), there are always ships waiting to get into the Canal, and there's the Canal itself.

Panama City has all the major US food chains, if you need something familiar, and tons of good local food if not.  We had big bowls of garlic clams in a hut on the beach that were fantastic, but the hit for my son was a restaurant on Av. 6 Sur that had a river full of fish in it.  Each booth was in its own tropical grove, and the fish would swim right by.

We drove through Casco Viejo, which I found interesting and he found boring, and spent a day going to the Panama Canal, of course.  This was also painfully boring for the kid - until a ship came through, when he was riveted by the hugeness of the cargo ship and the action of the locks.  The crew of the ship all came to the side and waved at us at the ship passed the observation area, and my son went nuts waving back.

It's hot and humid, and you'll need mosquito protection.  But it's a dollarized economy, so you don't have to change money (kind of a bummer, between the weak dollar and our newfound pastime of currency collecting), and English is very common (although reading and speaking Spanish helps you be more independent).

Maybe when he's older, or if I can borrow a kid who would rather see animals than ships, we'll go back for the Pipeline Trail.