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Thank you so much everyone for your helpful advice, both about the local German schools and where to look for housing. I am encouraged by many of your positive comments.
Annie
If your children don't speak a poke of German, they will put them in special classes and will loose grades. In the case there are no immigrants (quite strange in Germany), the kids in those classes will have impairments, will be very slow learners and the end result will be catastrophic. Don't pay attention to Germans, but to foreign people that went though the process. American HS have nothing to do with German schools, luckily for Americans.
As for the school system: If your children don't speak German very well they might indeed not end up in the highest, university-preparatory school (Gymnasium) right away or they might have to repeat a year. Perhaps you can also look into Gesamtschulen in which this switch between the school branches seems to be easier. However, no idea about the general quality of education there. I know of quite a few immigrants who went there (with little knowledge of German in the beginning) and most of them made their Abitur.
Your youngest ones will go to a grade school and should have enough time to adapt before they are put into one of the 3 following schools (after the 4th or 6th grade). The whole process is said to be easiest for grade school children.
Unless they end up in a poor, inner city ghetto Hauptschule nothing of what a few posters here suggested will happen. I assume you'll be moving to a more suburban kind of environment, so don't worry too much about it. If you decide on moving to Germany I would urge you to teach your children German as soon as you can because that will simplify a lot of things. If you are too worried about all that you shouldn't take any forumer's advice (especially not from ones who do not even live in Germany) but contact the local Schulamt in order to find out where your children would end up in the public school system and if that's not what you want, send them to an international/bilingual school. I am sure there are plenty in the Cologne area.
Beer is also not sold at any high school, what a nonsense.
I appreciate the advice from German people or people who did live in Germany, since that is where we will be living ! We have already begun a few small phrases with the children, and we will indeed continue the process when we find out our move is definite (we will find out next Tuesday). I have another question for those who are German or who have lived in Germany : a friend of mine who lives in Cologne has mentioned that for local German public schools, cost after the first child is free. I have not heard back from her about this, so I am wondering what that means exactly, since everything I have read says that primary schooling in the state schools are free. Can anyone explain this to me? We would not be sending our 4 year old to kindergarten. She would just stay with me until school is required for her, at primary school age. Thanks in advance for your help!
friend of mine who lives in Cologne has mentioned that for local German public schools, cost after the first child is free. I have not heard back from her about this, so I am wondering what that means exactly, since everything I have read says that primary schooling in the state schools are free. Can anyone explain this to me? We would not be sending our 4 year old to kindergarten. She would just stay with me until school is required for her, at primary school age. Thanks in advance for your help!
Don't worry, Germany has good schools and kindergartens, anything is free or affordable.If you do not want to send your child to kindergarten no one will demand it from you.The quality of German public schools is at least three times higher as the US's ones.
The ultimate goal being that they qualify for university in Germany.
Children should begin to study German Language, the better they know German the better are their chances by education. To achieve a qualification for an University they must have Abitur which can be make by Gymnasiums or Gesamtschules.
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! We have already begun a few small phrases with the children, and we will indeed continue the process when we find out our move is definite (we will find out next Tuesday). I have another question for those who are German or who have lived in Germany 
