I could've written Bethany's post almost verbatim. My 2.5yo DS was present at his brother's birth. It was a looooong birth and it was wonderful to have him there. My mother lives nearby and they are very close, so she was in charge of taking care of him for the whole time. (In fact, she spent the night with him after the baby was born, too, so we didn't need to worry about him joining me in the "big bed" with the newborn. Though we didn't even realize she was there until morning!

I think we were tired...) Anyhow, back on topic... He was prepared with books and videos and even TV shows. We absolutely love the book "Welcome with Love". He read the book with Grandma over and over during labor, too, and would come check on me, then run back into the living room to read the applicable section of the book (mostly the "mum's being loud" part!). They also were able to take him out to dinner and then returned when they were told we were getting close. That was helpful, really, because I had fewer interruptions and more time to focus - BUT I had no ability to worry, anyway! I knew he was well cared for and HAD to focus on myself and laboring - there's just no option!
So, my DS was there for the final pushes, and was held in Grandma's arms next to the bed when his brother came out. He was, according to Grandma, yelling, "My baby! My baby! My baby is here!" He was the first one to kiss the baby, and helped cut the cord. 2.5 years later, he still has memories of that day, though obviously not as clear. He has told me since that it was "messy" and asked appropriate questions about the birth.
We are due with our third child in October, as well, and will for sure have both boys there - available to be part of as much as they would like. Our oldest son will be 5.5yo and our younger son will be 3y1mo. They both still love that book, "Welcome with Love!"
