One thing we had to get our heads around at first was that when we do the rosary with little ones we have to roll back our expectations for our own meditation and remember that the kids are learning how to say the prayers, to remember the names of the mysteries, and to be quiet through prayer time. That being said, we do a short rosary---each mystery we say one Our Father, one Hail Mary, one Glory Be and the Fatima Prayer (O Jesus). Now we do all five mysteries this way each night, but at the beginning we would do three (or even one) along with all the beginning and ending prayers (we have added prayers to the end like a litany of all of our family saints).
Another factor that made the family rosary work so well for us in the end was that we do this at bedtime, with the kids in bed and lights out. In the beginning they all fell asleep during some part of the rosary. Now, they mostly stay awake and they take turns leading each mystery. Four year old A. can say all the prayers by heart including the Creed (though you my have trouble recognizing it...she tends to skip words :)) and that is ONLY from saying the rosary together each night! In other words, I didn't spend any time teaching her the prayers outside of our actual prayer time. Eight year old M. can lead the entire rosary, saying all the prayers and remembering each of the mysteries in order. Six year old D. can do it almost as well as his big sister.
Our nightly rosary routine really works for us!