As a matter of fact, Beth, there is a line of bug-repellent clothing. It's the very clever Buzz Off line from Ex Officio, just hitting the market in substantial numbers this year. The Buzz Off stuff is made with a fabric that is impregnated with permethrin, a synthetic version of a natural insecticide found in certain plants. The breakthrough that Ex Officio made was to create a way to bond the permethrin to the fabric, so it can endure repeated washings without losing effectiveness (Ex Officio claims it holds up through 25 launderingsbut don't dry-clean the stuff). As a bonus, this line of clothing also has an SPF rating of 30.
Ex Officio makes a pretty wide range of children's clothing with Buzz Off. Examples: A two-tone long-sleeve crew ($42; www.exofficio.com) and convertible pants with zip-off legs ($48). Which, I admit, is a little pricey for two kids who will outgrow it all in one summer.
Budget considerations aside, you might still find that a little insect repellent is helpful, especially on exposed ankles or necks. However, the Buzz Off clothing gives you a real head start on battling summer's perennial double scourge of sunburn and bugs.