Hi there - I hope my reply isn't too late! This NV board is kind of dead. :(
I am actually originally from PA. I moved to Ely NV about 5 years ago for a high school teaching job. Living here in this small of a town is not the best situation. I love my husband and this is his hometown, which is the ONLY reason I stay here. :) However, I have been to the Fallon/Reno area multiple times and I love it! Reno is big Nevada town with a city attitude... I've never felt unsafe there though. And there are plenty of things to do. I can't help much with the toddler items, but I'm sure there is plenty, the area has a lot to offer.
The cost of living is definitely higher than I was use to... again though, that's my perspective from Ely. I think Reno/Fallon are a little better because they have so much more in their areas. Be prepared to pay more for a house than you would have back east.
I think you'll find the school systems to be above average. The high school I work for as been a "Model" school twice since I started working here, as well as making AYP every year. AYP is just Annual Yearly Progress as mandated by No Child Left Behind. Again, I am not speaking directly for Fallon, but I know that their school systems are MUCH better than Clark County (Las Vegas).
I think the west has a lot to offer. It is definitely different than anything I've ever lived in. The views are gorgeous and I still giggle every time I see a tumbleweed blow across the road. :) I think you could definitely live here and enjoy it for 3 years. The biggest adjustment I had to make was being prepared to get in a car and not see any civilization for at least 2 hours. It's VERY different, but I think that Fallon will allow you to have all of the things you are accustomed to. :)
Good luck in whatever your decision is!!