To answer the question that Rikku-chan asked several posts ago, yes, I am an ardent supporter of Inuyasha x Kagome. I just like to keep my options open just in case Inuyasha x Kagome doesn't work out as planned (which is impossible for all intents and purposes, in my opinion). By the way, I like Kagome better than Kikyo.
As for Inuyasha's and Kagome's kids, well... Quarter-demons? I suppose so. They'd most likely look like the kids in the picture that Rikku-chan provided us. As for any powers they might have (spiritual powers similar to Kagome's, ability to wield the Tetsusaiga and use all of its abilities, et cetera), well, we can only imagine at this point. As Rikku-chan said earlier, unless they make a follow-up, we're gonna be left hanging.