DD and I went to Hanoi in 2005 when she was four (took her backpacking through Vietnam and Thailand for six weeks on my own). Hanoi was great. Water Puppet show was lovely - get front row seats for a good view (also, cover yourself in mosquito repellent as there's loads of them in there!)
For the first two nights, to find our feet, we stayed at the Sofitel Plaza. Lovely hotel but slightly out of the main part of Hanoi and a bit of a pain getting back there after a day out. Lovely staff though, and overlooks beautiful lake. After a couple of days we went to a hotel in the centre of Hanoi, can't remember it's name, but was recommended by the nice people in the Kangaroo Cafe, who also organised our trip to Ha Long Bay where we stayed for 2 days and a night on a boat in the most beautiful part of the world I've ever seen
They were also lovely when DD threw up all over the table on the morning of the trip after having a bit of a weird reaction to the anti malarials she was taking (and soon stopped taking - she was fine - we stuck to the main drag and didn't go off into jungles or anything)
We went to see Ho Chi Minh's body in the Mausoleum - check the times it's on display though, as often closed. They have a special viewing platform for children and DD was thrilled to get such a good view and still talks about it now, three years on.
One day when we were there the weather was awful, constant rain, so the two of us went to have a hair cut and mini-manicure - cost about $10 for the both of us! There are also some lovely cafes near the lake in the centre of Hanoi with great cakes and ice creams.
Vietnam is very child-friendly, we had to stop to chat to people every few minutes and DD was showered with sweets and toys!
Have a fab time!