Our initial plan was to rip out all of the grass in our backyard (there's not much), and replace it with wood chips or some other soft surface for under our play structure. I'm beginning to reevaluate that. We're still going with wood chips under most of the structure-- one of my little ones is a seriously bold climber and she's already taken a few tumbles, so padding is a must for my sanity-- but I think we'll leave a small patch of grass.
I used to wonder what's the point of such a small lawn, like the one pictured above. But a little green really does soften the yard and help bring it all together. Besides, we'll need a place to pitch a tent for backyard camp-outs, or an open expanse for a couple of cartwheels when the kids get a little bigger.
Image credit: Jeremy Bevan Gardens