If it makes you feel any better, the fact that the audience is predominantly preschoolers and their parents means that you don't have to worry about making it too fancy or "professional" sounding- small children are actually much more inclined towards simple tunes rather than a lot of fancy footwork. I think it's enough just to have fun with it- if you do, it'll come through in the music and kids will gravitate towards it just for that alone.

That said, I'd be happy to lend a hand as well- feel free to record your side of things, shoot it over my way (or give it to the community and see what others around here do with it), and I can add bits and pieces.

As for recording setup- what do you have to work with? I once recorded a whole set of songs onto Garageband through the internal mic on my laptop and it sounded pretty okay. So it's possible to just use what you got. Optimally, if you have a digital flash recorder or else a tape recorder and a mic (any old mic will do), you can get a more directed sound. If you were doing guitar and vocals, I'd recommend multi-tracking (recording one by itself, and then recording the other on top of it), but this requires some sort of software such as Garageband (if you have a Mac it comes pre-loaded) or Protools or something of the like. If you can't multitrack, just bang it out and sing. NewMonya did guitar and Vox for "Happy Birthday" and got good results.

If you're a classical guitarist, it's a little tricky to get a "professional" sound anyhow without a little bit of gear and know-how. The reason being that the tone of a good classical acoustic is difficult to record without some sort of tonal distortion/quality loss/phase issues; furthermore, as classical guitar relies so heavily on careful dynamic range, it can be hard to record at the right level with the right amount of musical "personality."

Anyhow, none of this matters- if you tell me what you have at your disposal with which to record, I can tell you in general terms how to best go about it. I expect thenewgreen could, as well. And I'm pretty sure there are others around here with a fair amount of real recording chops who might be willing to pitch in their two cents.