I'm not familiar with the Kala brand of ukuleles, but I own the the Lanikai LU-21 uke (around $80) and it's a great little instrument. And it's what Zach Condon of Beirut plays.

I find guitars and bass guitars on Craigslist all the time~

You are far better off buying a quality plastic recorder than a wooden one for kids. Yes, wood is organic and natural and earthy and all, but it has to be swabbed out after every playing session and then stored properly so that it doesn't develop cracks. Even a tiny crack can keep it from playing correctly. Yamaha plastic recorders are a much better buy for kids.

Here in the UK, Kala ukes are very popular. They're great, I have one myself (a Lacewood concert). The one above is a very good entry-level uke, I've played one that a friend owns and really liked it. The Makala Dolphin is also fantastic for beginners, or anyone who just wants a cheap instrument that sounds actually really good and costs hardly anything.

Really? Just go yard saling on any given Saturday - or search CL, as someone suggests - and you'll find all the instruments of previous wannabes who never made it, at extremely cheap prices.

Kids don't need expensive guitars or ukes or drums their first couple years, when you hardly know if they're going to stay interested. If they become a virtuoso, you can still even find better deals on CL for good instruments.

Not everybody is blessed to live in an area with an extensive CL, and not everybody can afford the time for hit or miss yard sales. So yay for options! Because if you live in a medium-small town, may not have an abundance of second-hand ukeleles to pick from.

My daughter (2 1/2) just started violin lessons, there are several violin options for less than $100. Granted they won't sound as great as an expensive 4/4 violin, but while she's learning and in dr. destructo mode I won't cry if she breaks it. She's learning from a Suzuki instructor and the violin is a good size for her small hands.