Well, based on what I've read, that's all I've heard as well. Although I do not have children (but I am married), a friend of mine and a fellow female-late 20s/early-30s co-applicant does have 3 kids and is married, she probably has a different take on this question.
Although she is not interviewing yet, she was questioned by an admissions dean about her kids and what she is going to do with them. Illegal? Probably not since she mentioned the topic HERSELF. Was she asked? No. This being a non-trad forum, it's inevitable that kids are going to come up because let's face it, in her situation, her classes for her first undergrad and prerequisites all revolved around her 3 children and their schedules, too. She could not be a transitional straight full time student. And she somehow managed to earn a 3.9 GPA with all that (and while working full time).
The question of kids came up when she was asked about her storadick class scheduling and why she chose to do certain extracurriculars. She, of course, had to mention the kids. The follow up questions is what drove her to the ground. The dean made a face (according to my friend) and said "well, what are you going to do with the kids while you are in school?" My friend was prepared to answer and started explaining all the extended family she had in town, her supportive husband, etc. The dean didn't seem impressed. She then said that my friend should consider a medical school in her city (ouch) and that there are "other schools out there" (double ouch). She also said that commuting/kids/husbands don't work very well at her school. Or actually the way she said it exactly was, "I have found it to be an obstacle to graduation for some students."
Maybe I'm misunderstanding or my friend is misunderstanding, but I wouldn't call this "discrimination" because having a family does make things tougher on people. Perhaps stating it the way she did was a little rough, but she does have a point. Would it also have been fair for my friend to say that she did get 3.9 in her prereqs fair and square with 3 kids? Sure. But my friend chickened out and got scared.
I guess the thing I got out of her experience is the less you talk about it, the less they are going to think about it and the less they have a chance to say that you're a "high risk to drop out" or "fail out" or "deferment" student because of family issues. I told her that too much explanation is probably giving them too much information (that is none of their business anyway) although it's nice to see that one has thought out the whole process. Bottom line, to me, it sounded like she wanted my friend to say that "school comes first, kids come last" whether true or not. I think you would have to be an idiot to think that such is the case, but they want to hear it, so give it to them...
My friend doesn't agree with me because she says she would never say that, even if it means passing up a med school admission. I guess everyone is entitled to their opinion.