Steven had a really good post on Raising Happy Children
I've actually seen parents take making their kids happy to the extreme. They don't want to discipline them because that will make them sad or mad. Know what? Tough!
Though the article that Steven referred to did not say it, kids need discipline. They need to know that parents have rules and will stick to them. If you cave in all the time on punishment and what not, it lets the kids realized that what you say doesn't really matter.
Some people fail to realized that we punish our kids because we love them, not because we hate them. We want to see them grow into great adults.
Show me a kid that doesn't have a lot of stuff, but who knows their family really loves them and supports them, and I'll show you a happy kid. Sure, they probably would want "things", but they don't equal happiness.
Many of you probably know kids (and maybe even some adults) that have all the stuff in the world, and are not happy.
Happiness = Love