What is your approximate budget and how long of a commute are you willing to commit to? What area are you moving from - it might help people provide you with comparisons?
Personally, I have always liked Mt. Horeb, Oregon, and New Glarus but they are a bit of a hike to Madison/Middleton. Not unbearable, but rising gas prices might make a commute sting more. I also have an acquaintance that lives in Waunakee and LOVES it - he brings it up whenever the conversation turns to homes/real estate/etc. I'm pretty sure all four of those towns could offer a good small-town atmosphere and prices below Middleton real estate.
I'm not familiar with any Christian grade schools in the area, but I can strongly recommend Kids Junction Learning Center [url=http://www.kidsjunctionpreschool.com] if you are looking for daycare/preK. It's a large Christian center on the Madison/Middleton border, the owners are fantastic people, and the teachers are well-educated and very loving. I'll admit that I'm slightly biased because I worked there a few years ago when I lived in Madison.