I don't think I realised until I had kids how strong my impulse to 'treat' them is (Not that there is anything wrong with the occasional treat). I am constantly shocked when I evaluate my reaction to the latest ELC catalogue - I find myself mentally listing all the things the kids "need".
For me, not looking at advertising is a real help in my attempts to avoid consumerism. We don't have a telly either, and I try not to go into town very much as I inevitably see things that we "need" when I'm there.
I can't remember where I read it (so no reference sorry), but I remember when I was studying Education, learning that it's not until children are around age 9 that they can really distinguish between advertising and entertainment, and can understand the motives of advertising.
Of course being able to critically evaluate advertising is a skill, and parents need to teach it over time, but I think this is a great reason to keep kids away from advertising when they are small. Apparently advertising to children is banned in some countries (Sweden?).
For what it's worth, I think the idea that we (or our children) can buy and spend a lot, and highly value material things, but not be materialistic is a nonsense. Aren't we the sum of our actions and thoughts?
I know most of you are not Christians, but I think Jesus' words in the Bible still hold true: "Where you treasure is, there you heart will be also".
I might look out that book F&Z - I just finished "Not Buying It" by Judith Levine, which was good read (bit boring towards the end though, I thought).
I also highly recommend "Toxic Childhood" Sue Palmer (?) It's a great read and addresses this and other issues really helpfully I think.