I owned a Mazda 323 for a number of years and it was a really reliable car. I currently own a ford focus which is a fantastic car, very economical, however I don't think it would be big enough for a family of 4.
I also would steer clear of used mitsubishi's.
I have 3 kids, 12, 10 and 6 and have no probs with them in the back of the Mazda, there's heaps of room. I had a laser before that and found the Mazda is alot roomier. I coulnd't take it on holidays though, we'd have to take the station wagon for that. But for just general running around and day trips it's fine.