Yet another dilemma we as parents face - to slather or not to slather (sunscreen, that is). I was a little on the obsessive side with it as my kids are both red heads, but then changed my mind slightly after a conversation with a fellow Mom friend.
She brought to my attention the fact that many kids these days, in part due to lack of sun exposure, are Vitamin D deficient. (It's interesting to note that even if you're diet has ample Vitamin D, the sun's ultraviolet B rays are required to activate it.) Vitamin D not only contributes to good bone health, it can lesson the symptoms of PMS in women, as well as reduce the impact of SAD (Seasonal Affective Disorder) because of its link to Serotonin levels in the brain.
I now have a new approach. I still watch my kids like a hawk while they're in the sun, and cover them with fabric when possible and make sunhats mandatory, but now I wait 15-20 minutes before putting sunscreen on them. Worthy of note is the fact that they have never burned (impressive, considering their milky-blue skin ;-) and in fact have barely even tanned. My daughter's temperament seems to have improved as well; I'm not sure if that's all in my head or in fact a result of the unblocked sun time, but hey - I'll take it!