Children aged under five are exempt from the minimum daily tariff and five-to-12-year-olds get a 50% discount, so travelling with children in Bhutan doesn't have to be financially crippling. However, kids may become bored with long, monotonous drives, steep walks to monasteries, hotel buffet food and the general lack of entertainment. On the other hand, they will be immediately accepted by local kids and their families. Lonely Planet's Travel with Children has lots of useful advice and suggestions.
Despite the welcome exemptions from the daily tariff, Bhutan is not well set up for travel with children. Child car seats are hard to find, and the minivans used for transporting tourists may not have seat belts to anchor a seat to if you bring your own. Some parents have reported being able to secure child car seats with straps brought from home. Most tourist-class hotels can arrange an extra bed, but cots are harder to find; bring a travel cot from home for younger children.
Upmarket restaurants in larger cities may have high chairs; they are non-existent elsewhere. Imported disposable nappies (diapers) are sold in larger cities, but nappy-changing facilities are very rare. Bhutan has one of the highest rates of breastfeeding in the world, but breastfeeding is done discreetly; local people would be surprised to see a tourist breastfeeding in public.