Hi, I moved to HK from Shanghai at the end of 2007. I lived in Pudong, my decision was based on distance from my husband work, facilities on the residential development and places to walk to. Plus potential to meet other expat mums. Oh yes, I was also pregnant - so I wanted to be near a good hospital.
I didnt find the polution much different to HK to be honest, however the traffic is worse and a little harder to get around. We opted for a driver, I personally do not think taxis are an option with children - especially in Shanghai - but everyone differs. You will also need to decide whether you prefer a house or an apartment. I lived in a great apartment block called the Shimao Riviera, they had great facilities, kids play room, outdoor wave pool with beach area etc. Lots of expats, and young families, a play group, easy access to afew play grounds, and a kids play centre called the Activity box. I was just over the river in Pudong. City supermarket (one of the best import supermarkets) was walkeable, plus other shops, restaurants, fake market .
However friends who wanted more space preferred Jingqiao in Pudong, where they could find a house. Lots of families and play groups out there too.
Its harder to settle into Shanghai than HK, but it can be a great place to live, it is important you meet people (other expat mums) quickly, and they will help you find your feet. I still know lots of people out there, and can answer any questions about specific topics if you have any. Otherwise this could be a long post with all my advice. Either post again or PM me. Good luck with the move.