We've done them all: bike trailer, tag-along, and the extra seat over the rear tire. Everything but the tag-along works well for a kid < 4. The bike trailers are nice because usually they fit 2 kids + some gear, but they can be spendy. The over-the-seat chair is nice because it is easy and simple, but it does make the bike more susceptible to rear tire blow outs with all the extra weight.
1976 FJ40 - green and mostly stock
1996 FZJ80 - not so stock