I own a 12 year old Cav whom I've had since he was a pup, so here's my input:
Are they easy going? Will they cope well with children?
Very. They're fun loving and adore attention so don't mind having their feet tickled and so on. We don't have children but mine often gets petted when out for a walk and takes it in his stride. They're good with cats as well.
How much exercise do they require as a daily minimum?
Absolute minimum would be two 15 min walks in my opinion. They are very flexible, though, and will keep going all day if you take them on a day out. Mine gets two short walks and one long walk most days.
Are there any breed pitfalls? Hips?
Here is the bad news - there are some very serious ones. Heart murmurs are considered almost inevitable by the time they reach middle age. Syringomyelia is also having a devastating impact on the breed - this can cause severe pain and seizures. If you google this, be prepared for distressing images.
How do we find a decent breeder?
We found ours via the Kennel Club - be prepared to go on a waiting list. Unfortunately Cavaliers are popular with puppy farmers and there are lots advertised online - these are to be avoided.
Do they shed excessively? I know that they need regular grooming, but providing that this is done satisfactorily do they shed much?
Yes, they shed a lot even when groomed regularly, particularly in warm weather. Because they are long haired, the shed hairs quickly build up and show on your carpets. Be prepared to accept some hairs, or to vacuum twice a day!
Their main issue is their health problems and unfortunately it ruins what is otherwise an absolutely perfect breed in every way.
Agree totally with @Squeaky Chicken's closing comment.