Are We Spoiling Our Children?

As parents are we spoiling our children too much? Nowadays we buy our children overpriced clothing, toys like XBox 360's, Furreals, video games, DVD's, etc. and will gladly spend $5 on a box of fancy kid's cereal rather than $2 on store brand cereal. This of course is a generalization, but I think many of us to a degree spoil our children. What do you think? Is it with good intentions and that our children are/will be grateful, or all in vain? What is your opinion?