Thank you dwanthny and Shadewing. Both suggestions are very helpful.
I used the search string
not tags:"=Kid1" and not tags:"=Kid2" and it worked perfectly and I saved it as you suggested. This is exactly what I was looking for.
If they want to keep reading using the ereader, I will create a separate libraries for them so that suggestion is helpful as well. I think they will eventually want to manage the books on their own computers. And then they will probably want an e-reader with more bells and whistles than the Sony PRS-505.
Thank you again for the help.