Best car to start with...

[MadisonMPG]

4900 bucks, buy the insight. Tell your wife you will leave her if she doesn't let you.

[gascort]

You have kids... A metro is kind of small if you're going to cart them around with the car. If it's commuter-only, go for the metro... or the Insight.
If you want more space, I really, really like my escort. I chose it based on being a non-interference engine (I have 180k on this timing belt but it's not too much of a problem if it does break), cheap parts, and pretty good crash test ratings (no side test ratings because it's old, but the front and rear ones are good).
I ended up getting a wagon, by chance for $500 that needed some light work, and absolutely love it. I haul everything in it except for 4*8' sheets of wood - it's only 38" wide in the back. It's awesome to haul the family and my daughter's stuff around in, and it gets great MPGs - 40+ year round with driving and aero mods.
If you look at craigslist in your city,
1993 FORD ESCORT LX WAGON SUPER CLEAN 4CYL 5SPD
94' Ford Escort wagon 29 mpg!

[MadisonMPG]

Lets see, I will give you a quick run down on your options.

Commute only:
10/10 Insight
8/10 Metro

Commute and drive kids around:
4dr metro 9/10
2dr metro 8/10
CRX 8/10


I would get the Insight, because you probably already another car that can carry the kids.