I'm not a parent, therefore I have no experience with taking children on trains, but when I was a child, taking the train was the only way we could really travel. We didn't have a car, and there wasn't quite the same express coach network as there is now.
As well as the usual suitcases (and cat basket), we usually carried at least one bag of "stuff" that would keep us amused during the journey: colouring pencils and a big pad of paper, a book or two and, most importantly, a plastic tub with lots of sandwiches, crisps and fruit.
My parents would point out various landmarks along the journey, and there were endless games of I-spy. I suppose it helped that I was into trains, as was my dad, so he'd point out railway-related things along the way. My brother was very small at the time, so the usual baby-maintenance was all he required.
All this travel was on loco-hauled stock, however, and we were guaranteed a table, which is essential for all of this to work. I'm sure I saw this mentioned in the "Quiet coach" thread, but perhaps a "Family coach" which has all-table seating wouldn't be a bad idea. It's not much fun when a family of four has to split up for a long journey, and I'd imagine it would be rather nightmarish when there are more than two kids.