For your first trip to San Francisco, I would stay in SF. You'll be within walking distance from your hotel room to see many cool things. While Sausalito is pretty, the only way into town is by ferry or driving the Golden Gate Bridge, which means delays and traffic. You didn't say whether you were planning to have a car, but most experienced travelers would say it's useless to have a car in the city. Parking is very expensive, most places of tourist interest in the city core are within walking distance, and the public transport system works really well.
Some people stay in Sausalito for the jaw-dropping views of the city, but in August there can be dense summer coastal fog which could completely obscure your view across the bay. I've had lunch in Sausalito on summer days where you couldn't see 30 feet across the water.
Stay in SF instead of Sausalito and there is a TOP Question which covers the areas in SF with hotels. With a Sausalito ferry, you are limited to the ferry hours and cannot stay late in the city without some other from of transport. Parking in SF is expensive and a car is not needed but agree with what Scott mentions
With only three days to spend in SF, it's not worth the time it would take to commute back and forth IMO. You wouldn't really save anything on hotels (more choice in hotels in SF especially if you have kids with you). Staying in Sausalito would pretty much rule out a rest break at the hotel during the day if anyone needs it. If you want to see the SF skyline from there, take the ferry over, walk around a bit, perhaps have lunch and then go back to the city.
Agree vehemently with all of the above advice.
Count me as part of the "pile on," that not a good idea (especially for a first trip).
The ferry hours have been mentioned consider that on weekdays if you wanted to do something in the city before ~7:30am or after about ~8:30pm . . . well, you're not going to be taking the ferry. And remember, those are the weekday schedules, it's worse on the weekends. Plus, it will cost you some additional time of since you'll need a (longer) MUNI ride to get to most of the places you'll be wanting to go; okay, not the Ferry Building or Fisherman's Wharf ;-)
Also, fares will be ~$20/per person/day, for two people over 3 days . . . you're talking $120. I'd apply that money toward my hotel budget and/or a good meal and enjoy: a) early morning walks, b) after diner nightcaps, walks, a movie or show, and c) not spending an additional 60 minutes each day "commuting" to my vacation.
That's my $.02,
I'd also welcome any touristy input. My husband and I will be traveling with our 14 year old son. He is really into sports and not so much museums.
As for Union Square vs fisherman's wharf, I think it's pretty well covered in the top questions. While fisherman's wharf can have nice views, it's very tourist centered and less central to transit. Union Square is a nice shopping area with many hotels and places to eat nearby.
Nob Hill isn't all that far from Union Square, but it's on top of a very steep hill and there are only a limited number of restaurants and things to choose from up there. The views can be nice, but the hill makes an obstacle that may be a bit of a hassle since you'll probably not want to walk back up the hill to your hotel and will probably want to take a bus, cable car or taxi back up the hill. I can imagine this can make it harder to pop back to your hotel during the day or may make you reluctant to go out for quick sight seeing or dinner at night since you know you'll have the obstacle of getting back up the hill afterward.
If your son likes sports you may want to see if the sf giants or Oakland A's are playing the days you are in town. There are also lots of outdoor activities like hiking in the bay area and even within the city if he is sporty in that way.
I think your choices come down to FW or US. Nob Hill is pretty dead at night with the exception of the grand hotels. US is pretty much the center of shopping and dining, and is closest to both ball parks and easy access to public transit. FW has a never ending carnival atmosphere which will probably appeal to Junior. From there it is an easy walk up to North Beach with great dining options and coffee houses, and China Town is just beyond These can easily be reached from US as well. Nob Hill means you can walk down but at the end of the day when you want to dump your treasures before going out to eat, well let's just say it can be more than a hassle.
does the same advice hold true from the berkley area/ richmond BART station?