I think the ethics mostly come into how you raise them, religion or not. It's ethical to teach kindness and empathy. It's ethical to allow your kids to explore while asking them questions that help that exploration. You can do those kinds of things no matter what faith (or non-faith) you practice.
Speaking as someone who was raised in an environment that gave lip service to kindness and empathy but was really very harsh, judgmental, and rigid, only one of my siblings kept something reasonably approximating my parents' faith. The rest of us are mostly some variety of pagan. Each of us had a painful journey out of our parents' faith to something. No matter how you raise your kids, they are their own people and will come to their own conclusions. You can make the path much more difficult than it needs to be or you can set them up for a much less traumatic journey.
Pedro the Lion (like Priests And Paramedics and A Simple Plan), the Sixpence None The Richer album This Beautiful Mess particularly Love, Salvation, the Fear of Death, some of Rich Mullins like much of A Liturgy, a Legacy, & a Ragamuffin Band.