The fats in milk and butter are essential fats in the diet, and a actually good for you in correct amounts. They are not nasty and evil.
TBH the notion that you would change a 2 year old to low fat anything as a weight related precaution is scary.
That's interesting Lime... I'd always been under the impression that all animal fats were the ones to steer clear of because they have 'bad cholesterol' and that the fats in plants were the good ones. But I'm definately not an expert in these matters, but in terms of adult health I was always under that impression.

And just in case anyone is unsure, I definately wasn't thinking about changing DS to low fat as a weight related precaution. The whole thing of changing them over was something I've come across in the past a few times (reading bits and peices and I think my MCHN as well) and I had thought it was at two, but wasn't 100% sure. Just wanted to clarify it.