Seth at Kingdom of Heathen says that raising kids religious is brainwashing.
I'm reminded of Richard Dawkins saying that labeling a child as a Chrisian, Jew, or Hindu makes about as much sense as labeling one as a Keynesian or Marxist, and could be considered a form of child abuse. However, at least one of the times he's said this he's added the same goes for labeling a child as an atheist, something plenty of religious people would agree with even if they don't agree with the first part.
The rub is that people tend to see religion as having an importance that economic and political beliefs do not. I can't quite place my finger on it, but there seems to be a reason the question of whether the universe is ruled by an omnipotent being is more important than questions of economic organization. For this reason, probably majorities of both believers and atheists want to see their kids sharing their beliefs, and I see where they're comming from.
However, a better pattern for child rearing can be found in Richard Dawkin's letter to his daughter where he, yes, says what he thinks about religion, but also encourages tries to encourage critical thinking about these things in an age-appropriate manner. Teaching thinking skills isn't as easy as teaching just beliefs, but it's more important than many of the things kids learn from their parents (and at school, I might add).