OJ - thinking of you in this horrible time.
I also wanted to share with you my experience of my father's death from cancer at home - in case it helps you to be clearer about how you want to handle it.
Dad had spent a day being very agitated, probably a day or so after he had become incontinent, he was also 'bed walking' a lot.
The afternoon he died they put in the morphine popper machine, Dad couldn't use it, but the family could - so that whoever was sitting with him could give him a boost of morphine if he was obviously uncomfortable.
Around 9ish he became very obviously in pain and so we called out the doctors, they gave his a shot of morphine and explained that it would not be long - i.e. hours. The doctor explained that before he died we would witness a marked change in his breathing and then shortly afterwards he would stop breathing. It ran just as he had explained - it was particularly good to know about the change in the breathing pattern as at that point we were able to summon those people who wanted to be with him at the end into the room. In the end, he died very peacefully (and after a long protracted illness with pain along the road, I think it benefited us a lot to see that his death was in the end a 'good' death).
Immediately afterwards we called two of him life long friends to come round and see him before the undertakers took him away - they say in the room with him and toasted him with a good malt! Then around 6am the undertakers came to take his body away - this was probably the hardest part (just to forewarn you).
I think, as long as the pain is well managed, that there will probably be nothing alarming about the death that you should worry about your DC;s witnessing - but I would be worried that they thought he was just sleeping as it did seem a bit like that. If that would make them worried about sleeping themselves or confuse them then you might want to think that through carefully.
As far as Steve's mum is concerned, then I think it would be a nice gesture to call her once his breathing changes - it is likely she won't make it in time but she will get a short while to sit with him before the undertakers arrive. I don't feel you should do this unless you really feel you want to - but although her behaviour has been inexcusable, it is her son who is dying and in the end letting her say goodbye might ease any disputes with her in the after math.
I'm sorry to make this such a long post, and also sorry if it isn't what you want to read right now - but it is difficult to know how much to say and at what point.