Hi, Ed,
Summer steelhead will be in the Deschutes during your stay.
The lower Deschutes, that is, the lower four miles of river is easily accessible by hiking, and the the lower two miles of this stretch are reserved for bank angling. You want to fish early and late. I'd hike up the west side from the parking lot at Heritage Landing until I was well above the first rapid (Moody). If you do this, you should see a cable trolley crossing the river in the flat water above the rapid. There is good fly water for almost a mile upstream from this point. You'll see other anglers aplenty along here, but you should be able to find a place to fish easily enough.
This area is a long way from Bend, however; although you can reach the area driving north on Hwy 97.
Fly tackle would be six-to-eight weight rods with floating or sink-tip lines. Good flies at this time of year are the Green Butt Skunk, Street Walker, Freight Train and anything bright. No. 4 hooks would be fine.
If you are a Spey caster, you'll find your skill fits well with the Deschutes, as the banks are crowded with alders along most of the drifts.
Most anglers use a modification of greased line technique, casting a bit downstream from straight across, and mending as needed to keep the fly swimming across the current at a steady speed.
You didn't mention how old your kids are and what tackle they would be fishing with. Steelheading is challenging at the best of times. It's not uncommon (at all) to get royally skunked; so, if the kids are little, tire easily, or get bored when they're not catching anything, steelheading may be something you might want to postpone for them for a while. Near Bend, there's an abundance of trout fishing, both stream and lake, which might provide them a more exciting and satisfying time.
The North Fork of the Umpqua, of course, is a notorious summer steelhead stream. There's roughly forty miles of the river reserved for fly-fishing only, and people come from all over the West (and world, for that matter) to fish its storied pools. Good information on where and how to fish could be obtained from the local fly shops.
Even if you don't catch a fish, casting through the famous pools and runs near Steamboat is an experience I think you will really enjoy. The beauty and ambiance of this area will stay will with and your kids long after your short trip is over. Also -- practically all of the fishing is accessible by road.
Hope this helps,
-- Eric