For what it's worth, we don't have a nursery.  We have lots of 
thumping and some squealing and the occasional outbreak of crying, 
etc.  It's lovely and people are lost when we don't have kid noises. 
We do have a cry room, or sometimes, if a kid is really upset, he'll 
get taken outside for a while.  It's a challenge for the mom's in 
particular, and for the family with six, even for Dad.  Once in a 
while, I feel like I've just preached to a zoo, but I can count those 
Sundays on one hand.

Kids usually are participating in lots of the service, though not 
necessarily consistently, by age 2.  They usually know most of the 
music by that time as well.  I can always hear my Lizzy sing, as 
she's usually a beat or two off of the congregation.  She just turned 
two, but she'll chant the Lord's prayer with you and parts of the 
Creed, etc.

Brian+