the Radio Flyer all terain wagon that is all wooden. We got ours from Toys R Us. I think $120 ish. I LOVE it! We got it for my first sons 1st birthday (he turns 6 next week) and have used it tons with doing home day care as well. Very useful for farms, zoos, festivals, etc. We STILL use it a lot. All the sides are removable, so without one side, I could even fit 4 kids. Two three year olds and a 2 year old would fit fine as long as they don't mind crossing their legs or legs alongside one another. None of these kids have ever minded, they really like the wagon. 5 year old even pulled me around the driveway in it. And it fits in the back of our Odyssey minivan without folding down any seats.
That said, for around the neighborhood, I don't think any wagon would be best...it's not the best for your back to use on a daily basis, pulling a wagon with one hand angled like that. I agree to get out the kids riding toys for that. Start small and work up the muscles. My older son LOVES bikes and always has, so when he turned 2 he'd ride a little plastic fisher Price tricycle a full mile around the neighborhood just fine. He loved those long bike rides even then. My older son was less trustworthy until age 3 when I could trust him not to suddenly turn to the middle of the street and not need to correct him every 15 seconds, but by 3 he could go up to a mile around the neighborhood on his 12" bike with training wheels just fine. So I'd start small and work toward a decent size walk with at LEAST the 3 year olds on riding toys/bikes. Have fun! :)