I have similar philosophy to tribeleader with my 3 dc.
My 4.5yo has been allowed to choose coke or other fizzy drink when we eat out since he was about 3.5yo. Though he doesn't always have it on those occasions, sometimes he chooses apple juice etc. We rarely have fizzy drinks in the house.
My 3yo dd only likes water to drink- she is free to choose any drink she likes and she always chooses water.
My 18mo dd won't drink water- only juice!
They also are allowed fun size choc bars or similar everyday.
I have never noticed sugar highs, they are all very good at self regulating and the 2 older ones have a very good understanding of what is healthy/not so healthy.
DS will often say that he is going to have some healthy fruit as he hasn't had much today etc.
My mum gave DS a kitkat this afternoon and he ate half then gave the rest to me. He then ate a huge dinner of fish pie and carrot and swede mash and left half of his Aero mousse as he was 'full up'.
not really sure what I am rambling about...but this philosophy is working for us atm