I think it really depends on so many things! My 3 older kids were at the birth of #4 and they were 6, 4, and 17 months at the time. I had my sister there to be in charge of them so my hubby could focus on me and I could focus on birthing. I also know that my births go pretty easily and I cope with pain silently (while this was my first homebirth, all my kids have been born drug-free). We prepped them (the 6 year old kinda prepped herself by finding the book "A Child is Born") so they'd know that there would be blood and all that kind of stuff. My kids all showed an interest in being there (well, the 17 month old had no clue what was going on) and they are not squeamish in any way. Bugs, dirt, injuries all are met with curiosity and not fear or repulsion. I think, too, that the people there helped my kids be excited about what was happening instead of scared (they said things to them like, "Are you excited to meet the baby?" "Look, do you see the baby's head?" and made room for them to watch and be a part of the birth) so positive energy and positive dialogue like that can really help!
On the other hand, I just attended my SIL's twin homebirth (one breech and one in the caul--an amazing birth!!) and for her son's birth, she'd had an epidural so she didn't know how she'd do without one. Her son is rather squeamish and often fearful about things. He's also very demanding and would be difficult to manage when the focus was so very much not on him (only child for 4.5 years until the day his sisters were born). So my SIL felt that it would be best for him not to attend. I think it was the right call. Especially since she ended up being very vocal and her vocalizations, particularly during pushing, would probably have been too much for the little guy.
For me, I loved making it a family affair, but for my SIL's family, it could have been stressful and traumatic. So I think it just depends. How do you think your kids will handle it? How will you handle it? What are you like during birthing? Do they want to be there (keep asking them all the way up until the big day so they know they can change their mind any time they want)? Is there someone who can take them somewhere out of the house if they get overwhelmed?
Ultimately, I think that if kids want to be there, are well prepared, and have someone there who can reassure them if they get worried, that it's a great experience for everyone!