I just completed 141 miles from Cumberland to Harper's Ferry with twin 7-yr old sons, riding 7 days, camping 5 nights at Hiker/Biker sites. This is pretty much the ultimate trail of its type in the U.S., but it's not for everyone. Specifically, while the double-track is in pretty good shape, within 3 days of rain you'll be seeing hundreds of mud puddles per day, 80% of which you can ride around, 20% you can't. This trip is made for hybrids, although between a road bike and pure mountain bike, I'd take the latter if you could carry enough gear. The C&O is infamous for breaking all things aluminum and thin and fast. Every fourth road-bike biker has a broken-parts story.
Upsides: Free swimming, stone-pebble beaches, etc. in the Potomac about every other night; free campsites, almost all with free water, benches, river views, ready firewood, and almost always complete privacy.
For three of our seven total days out, above mile 125, we didn't see a single soul on the trail, although at general stores just off the towpath we'd sometimes see day-riders. Even the weekdays before Labor Day the towpath was utterly person-less -- good for us, but I'd expected 20 through-riders a day. We didn't see more than 15-20 through-riders over the whole week and 141 miles. Many of those were going all the way to Pittsburgh, a 350-mile run.
To summarize: This is one hell of a ride, and the only one I know of in the country of its length and beauty that children or anyone averse to traffic would love, but you and your bike both have to be fairly tough, and you should be pretty good at camping because generally, you have one resupply chance per day and that's it. And sometimes not even one.
Oh yeah -- if you can't handle walking the bike through a totally-dark medieval 3200-foot abandoned canal tunnel -- the Paw Paw tunnel -- then skip this trip. I don't think one in two adults can go through that thing without getting the heebie-jeebies.