I think I misunderstood you, Adir. I assumed you were going to have the kids do their own collecting and preservation for study. Collecting for yourself is a different proposition and the advice you received from Dave and Eric is the way to go. Almost every entomology text book I'm aware of has chapters on good collection, preservation, and data recording methods. Google search or head to the library. Dave's advice on making sure date and location info is with the specimen (either on or in the vial) is very important. A bug in a bottle without this info is useless after memory fades.
Sorry, whats that with the mangled preserved specimens thing again? You mean the preservative starts to chew them up a bit?
No, the kids will from handling them.:) If this is going to be your personal collection, I wouldn't let the kids touch them outside of the vials. If the purpose is to let them observe them in the vials, I'd go with affordable glass shell vials (under $15 per 144 ct) with the plastic stoppers and use 70% ethanol. Keep out air bubbles and your kids can handle the vials to their hearts content. Plastic vials are a good option as they aren't breakable, but the trade-off is the viewing isn't as good. For my personal stuff, I've gone to the expensive glass as mentioned above because it is very clear and distortion free. That's important for me when photographing or modeling for fly design, but not a big issue for the classroom.
Collection methods? For nymphs in riffles, I prefer a kick net with no kicking (hard to do alone). Hold the net in the water at a slight angle downstream and have somebody a few feet upstream rub rocks with their hands gently. Then lift them a little off the bottom and do the same thing, working the sides and underneath the cobble. Not only is the sample usually greater but the poor critters (and the stream bed) will be less damaged. For nymphs in weedbeds and soft bottoms, I prefer a sturdy D-net. For adults, a butterfly net works pretty good. Manipulate the flies into a clear box. Try not to touch the wings. Porch lights or camp lights (with something flat next to it for the flies to land on) near the water are great collection tools.