This is a little offbeat, but we did our "rehearsal" dinner at Oregano's in Old Town Scottsdale. We had one of their outdoor patios to ourselves, and a great, fun casual dinner with family and friends before the more formal wedding at Royal Palms. Very inexpensive, and the out of town folks loved it.
I just got married in October and we had our rehearsal dinner for about 40 people at Tandoori Times in Scottsdale. They made the food pretty un-spicy, so even my less adventrous, Midwestern relatives enjoyed it. I think it was in your price range. Even better, they gave us the entire patio for it and had a buffet, so we got to enjoy the lovely weather. The food was amazing, the staff was really accommodating and they even had bellydancer on Friday night. I couldn't recommend a better place for you!
I think that most of the "cowboy" steakhouses in town could deliver something (more the experience than the meal) that would appeal to the kids and come in at your price point. Here are some of the better known ones:
Pinnacle Peak Patio
I don't have much experience at these places, except for an occasional forced business function at Rustler's Rooste, but they are unabashedly tourist-oriented. If most of your guests are coming in from out-of-town and would enjoy a "cowboy" experience, this option might work.
If your focus is more on the food, I think some of the choices mentioned in other posts above might be better.
Because of the 2:1 ratio of the kids I'm thinking Patsy Grimaldi's, that "Brooklyn" pizza chain. Thin crust, fresh topping pizza, unlike anything else in the valley.
Casual yet yummy and what kid doesn't like pizza? They also have a great bar (at least the one in Chandler does) and there's a patio you can rent out as well - you said Oct 2007, right? They have yummy salads too.
This may not be at all what you had in mind but...
When we got married we had a big formal wedding the day after Thanksgiving. We also hosted a Thanksgiving buffet at our home the day before for about 30 family and out out town guests.
So for the rehersal on Wed night we wanted something fun and cheap. The two sides of the family had never met before and are as opposite as can be so we needed somethign also casual that would be conducive to visiting and a hopefully successful meeting.
We ended up renting the Pope's table at Buco di Beppo's in Seattle. Everyone had a really great time getting to know each other and we fed 22 people for right around $300 including that wonderful jug chianti they serve.
Certainly not the best food around and might not be the right environment for your crowd but it worked great for us rather than something formal since we had plenty of formality coming with the wedding itself...
I know someone else who did the same thing for exactly the same reason (families didn't know one another, etc). We were invited as "the bridge" i.e. the only non-family members to attend but could be depended upon to keep the conversation flowing if anything prickly or difficult arose. It was a rollicking-good party, enjoyed by all. The walls of Buca di Beppo alone can keep strangers busy for the whole meal. Also, it's tough to be stilted when you're sharing the table with the Pope's effigy at table's center. We even put a hat on him!
However, after re-reading your post, I see the total count is more like 45 and that is too large for the Pope's table. Sorry because it could have been a fun night for everyone.
whoopsie I missed the total quantity too!
also, i'd just like to mention in my own defense that the "wonderful jug chianti" was meant tongue in cheek! Like everything else at Beppo's it's not the best out there but can be fun and may even serve a purpose at time(definitely served a purpose that night....my CFO dad and my overgrown hippie FIL were the best of friends by the end of the night thanks to that stuff!)
Tradiciones sounds like it could be a great option. I'm sure margaritas work as well as chianti for breaking the ice if needed!
Hmmm, it totally depends on what kind of scene you are looking for, but I have been to a private dinner at Golden Buddha at the Chinese Cultural Center and the food and service were great and the scenery is decent too. It should fit your budget, is a bit different than the norm and kids seem welcome.
A totally different place would be Monti's on Mill - retro Southwest, can be described as campy, but the food is decent and they can accommodate the crowd and budget won't be a problem. I attended a rehearsal dinner there and thought it was fun. Esp. good if lots of guests are from out of town and want the "Arizona Experience" and the kids will fit in just fine.
Another interesting option might be Layalena - a Mediterranean restaurant on Scottsdale Rd north of the 202 with dancing and a hookah bar (the last I checked) and good Lebanese-style food. They can accomodate large parties and it is affordable. Totally fun and different. http://layalenarestaurant.com
Another one - Tradiciones. It's been reviewed lately on these boards. It's connected to Phoenix Ranch Market and is big and beautiful, delicious, affordable and kids would fit right in. It has a nice festive feel also.