Like in Fable II I'm sure you can have children (remember that you are the child of the hero/fiend from Fable II - if you have a Fable II character, anyway) however if their mechanics will have changed even at all... we can just hope.
What I want most of the children in Fable III is to raise my own army of under-age slaves--I mean that they actually do stuff - and not just a post-game quest like in Fable II. I want them to grow up older than just 10 or whatever they can reach (I mean your own character never stops aging, does he/she?) and to be able to interact with the world. Maybe when they reach 18 get a job which could alter the world you play in somewhat. Maybe you can get a discount at his store, or entry to the museum after hours. Maybe he could even grow up to be your rival or enemy later in the game!