definitely don't do it without the parents. I'd recommend <i>She's Not There</i> by Jenny Boylan-- she was married with kids pre-transition and I'd say they've handled it really well.
For myself, I say something like I'm supposed to be a girl, so I see the doctor, and they help me get better. Obviously you have to elaborate a bit when you have older kids, but you stress that it's not contagious, and if you're related that simply because it happened to you doesn't mean it will happen to them. Other than that, kids are just fine.
I had a little girl at my church ask if I was a boy or girl. I said that I was a girl, and showed her my name on the schedule. She seemed satisfied and then ran off. The next time I saw her, she called me Ms. Jessica. I wanted to grab her and give her a huge hug. Kids can be really awesome.