I find the idea of innocence to be interesting. In a child it seems to be a lack of awareness of the consequences of their own actions.
This is brilliantly illustrated by the TV show "the Simpson's" where the roles of Bart and Homer are reversed for the most part. Bart generally understands the consequences of his actions whereas Homer doesn't have a clue. Homer is the innocent in this case.
I find this definition of "child-like" innocence pretty robust, it seems to fit with most of my experiences. Knowlege is what destroys this form of innocence, not evil, so it explains a lot of the lies that we tell. Adults vicariously enjoy the hope of their children and fear that telling them the "truth" will spoil the vision.
With my kids (I have 5 kids and 2 grandkids) I have tried to be as honest as possible but when you understand the "truth" to be very complex it becomes difficult to provide a simplified view that a child can fully understand (especially when you know you don't fully understand it either). A partially understood truth may be as misleading as an out-and-out lie but more difficult to unravel.
Another reason adults like to preserve the "innocence" of their children is that it reminds them of when they had hope and helps them relive or rediscover it.