This is a perfect "first western" for your kids. I had to read this book in 7th grade and I remember liking it very much. There is much symbolism that runs deep. There are some parts of the movie that may seem cliche, but remember, the cliche started with this movie. This is one of Jack Palance's first movies and he is 100% perfect as the bad guy who wears black - he was nominated for best supporting actor Oscar (along with the little boy in the movie, Brandon De Wilde). The movie was nominated for Best Picture and won the Oscar for best Cinematography. It was filmed in Jackson Hole, Wyoming and the way the director incorporated the Grand Teton Mountains in most shots has influenced many future directors.
If your kids are going to watch this, then this is some background that they will need to know. This movie takes place in the late 1800's when the "Homestead Acts" were enacted to encourage western expansion. Farmers could be granted a large amount of federal land if they moved their farm there and worked the land. Before this, the ranchers would use wide paths of land to drive their cattle from the ranch to the railroad. When the homesteaders moved in, they fenced off the land, making the cattle drives difficult. This movie expresses both sides of this argument. The problem is, the ranchers eventually bully the homesteaders, sometimes with deadly force.
Back to the movie - The story is told through a young boy's eyes. Shane arrives in town and stays with a homesteader family. We don't know anything about his past, but suspect it has been a rough life and he is trying to escape his past and finally settle down. This is symbolized when he trades-in his rough, cowboy buckskin clothes for his less manly worker's clothes. He goes into town and tries to buy the boy a soda pop, but is essentially bullied out of the saloon by the ranchers as he is staying with the homesteaders (and not drinking whiskey). As he is trying to avoid confrontation, he leaves quietly. When the ranchers realize that the homesteaders are not going to leave the valley, they hire a gunfighter to force them to go. However, as this conflict escalates, Shane realizes that he is the only person who can protect his friends.
Also, one of the most famous movie quotes of all time had it's origin in this movie. In "Taxi Driver (1976)" (NOT kid appropriate, by the way), Robert DeNiro looks in a mirror in a psychotic manner and asks "You talkin' to me? Well, I'm the only one here". The director of Taxi Driver is Martin Scorsese, who is an avid movie historian (See "Hugo"). In "Shane", Shane walks in to the saloon and is approached by the ranchers who start making fun of him. Shane turns to them and say "You speakin' to me?". They respond, "I don't see anyone else here."
This movie also takes place at the time when the "wild" west is becoming more tame and settled. Thus, the days of the gunfighter are over. As stated above, the days of the cattle drive is over too. So both Shane and Ryker (the rancher) are becoming obselete - Shane knows it, but Ryker does not. This fact heavily influences Shane's decision-making at the end of the movie.
The last 15 minutes of this movie hold some of the most legendary Hollywood scenes of all time. Famed director, George Stevens, builds the tension masterfully. Every person in the room will be on the edge of their seat. The scene where the boy, Joey, yells for Shane to come back has been parodied over and over. Also, the true fate of Shane is also debated to this day (If you've ever seen "The Negotiator" from the 1990's, Samuel L Jackson and Kevin Spacey have a long discussion about this).
Like most movies from the 1950's, there are some slow moments and there really isn't much that is objectionable. Younger kids can watch it, but it is probably best for middle schoolers and older. The American Film Institute rated this movie as the #45 best American movie of all time.