DS has been to a funeral (not with us), but on the day Mum has him, her and her partner had a funeral of a family friend and wanted to go, Mum asked if I minded if she took DS (She was happy not to go if I wasn't happy with it) and I was fine. I was more worried about him being disruptive but Mum said he wasn't, and just seemed to 'understand' the mood and the surroundings. Towards the end when he got a little fidgety Mum's partner took him outside for some fresh air.
I've been to lots of funerals with kids - young and old! I agree with Laranna, its part of life and in most cases I think its appropriate, especially when the kids have been a part of the deceased persons life