I've taught in a few schools, and had dc at others, and I've never heard of the fact you've taught an older sibling being a deciding factor - how odd!
Personally (speaking as a 3rd child) I know for sure, that, given a choice, I'd choose to have a teacher that had never taught anyone in my family before - any opportunity to be just judged as 'you' and not your siblings, to be welcomed. That's the same for my dc too. But in all honesty, I would not expect a school to ask me which class I would like my child to go into.
That said, I've never come across a school where they have pandered to "I'd like..." requests from parents either - completely different if there are valid reasons but not "I like Mrs X but don't like Mrs Y" type conversations. Surely no school does this? there was a long thread in this last week where a poster asked if she could ask if her dc didn't get put in the shouty teacher's class, and it went on for several pages, but the overall summary was - don't do it, you'll look like a loon'.
My experience, as a teacher, is that schools want the classes to be fairly even though, so would agree with everything Zingally said, EXCEPT the first one. 