Children of the Damned is not so much a sequel to Village of the Damned (1960) as it is it's own entity. You don't really need to see the earlier film in order to enjoy the second one. That being said, there is a lively debate regarding which one is the superior film. My preference is Village over Children.
The reason for this is that Village sets a more menacing tone. The children in question are more menacing and the "glowy eye thing" works better in this film. In Children it is more inconsistent and the kids spend the vast majority of their time staring blankly and saying nothing.
Furthermore, Village has more of a Sci-Fi/Alien thing going on, while Children is more a Cold War morality/Human evolution tale. Both have their merits. It just depends on what you're looking for.
So, let's talk about Children for a moment. The cinematography by Davis Boulton [The Haunting] in this film is gorgeous. The stark black and white is beautifully shot and gives the film lots of power. The art direction by Elliott Scott [Indiana Jones and the Temple of Doom, The Haunting] is also spot on, especially the scene which take place in a dilapidated cathedral.
The acting is also solid through and through. The children are well cast, although I prefer the David in Village over the David in Children who takes on a more "Damian Thorn in The Omen" kind of vibe. Barbara Ferris is particularly good as Susan, who becomes the protector of the children. Her character is much stronger than the Mom in Village.
My advice with Children of the Damned is don't give up on it half way through the film. It is a slow starter but the ending scenes are really excellent and well worth your time. Just go into it knowing this is not so much a horror film as it is a morality tale.
Rating: Very Good.
For more info check out the film's entry in IMDB.