Model Rectifier Tech 2 power packs are good and can be found new or used on Ebay sometimes for less than $20.00. Because of the weight shipping can be almost as much as the purchase price. Check out any train shows or swap meets within an easy drive. Go early for the best selection. Just getting back into the hobby I would stick with DC instead of DCC. While DCC is great, by the time you buy a decent system, buy or equip a few locos with decoders, you will easily invest $300.00 to $500.00
Good advice given already. A Model Rectifier power pack would be the best choice at this time. As far as DCC is concerned, I'd wait and see how long the grandkids' interest in trains lasts -- it may be a very short term and then you'd be stuck with a rather pricey control system.
If it's more for your own enjoyment than the kids, then get something better than what you currently have. DCC (and sound) equipped locomotives are available from several manufacturers and are much higher quality than the AHM stuff, which was the cheapest of the cheap Christmas train set quality.
AHM went out of business many years ago; resurfaced under the name IHC, and that company is also now kaput. Newer products are of a much higher quality. You will never be able to find parts for AHM products if something happens and it stops running.
Some of the AHM locomotives I have had would run at only two speeds: Full blast and smoking. Their motors were very poorly made.
If you are thinking of getting back into the hobby for yourself, you should visit a few train shows, clubs and shops. I live outside of Boston, and I've found that entering "train show massachusetts" in a Google search gives me several different listings of local shows. Many of these shows feature both dealers and club display layouts, so they are a great way to both look for used items (or new ones) and to see what's being done in the hobby in action. They are also someplace to take the grandkids, as many are very kid-friendly.
If you're serious about DCC and higher-quality engines, visit a shop and listen to a few of the newer locomotives with sound installed. They've come a long way from the old Lionel whistles of our childhood, but with all that technology, they can give older guys like us that same feeling of little-kid fun.
It takes an iron man to play with a toy iron horse.
Tech 4's would be fine as well, they're a lot newer than the Tech II line. A Tech II can be over 20 years old, which means there's always a danger of one from eBay being defective in some way. I'd consider spending a bit more and going to a hobby shop and buying a brand new one to get started - it will have a warranty and you cna take it back if it doesn't work, which should save frustration and give you some peace of mind. It'll cost more, but you then have some guarantee that and problems you encounter will be in the track or the loco itself and not your power source.
--Randy
Modeling the Reading Railroad in the 1950's
Visit my web site at www.readingeastpenn.com for construction updates, DCC Info, and more.