East Grand Rapids. You'll pay more for your home and pay higher taxes on it, but you won't regret raising a family there, especially if you like to get involved in your community. Schools are excellent, crime is low, and maybe best of all in this era of $4 a gallon gas, you can walk to everything....schools, churches, ballfields, ice cream shops, and the lakefront park.
If EGR is a bit spendy, consider Wilcox Park. It's just across the EGR city line, inside Grand Rapids proper, It's a great little neighborhood near Aquinas College on one side and the Farmer's Market on the other. Wilcox Park is a perfect place to play with your kids, or walk your dog, and there's a good Catholic elementary school on Wilcox Park Drive. You can walk to everything from the Post Office to the market to the bakery. And there's 3 different bus service lines within two blocks in any direction that will take you all over town, cheap.