Now I can completely relate to why you want a standard Windows desktop but with an icon that transparently launches as browser inside a sandboxed environment, but I'm not convinced using VMs will work as transparently as you'd like. Ignoring the problems listed above, you're never going to have a seamless interaction between the two because your family will not be able to upload pictures onto Facebook nor messageboards. Obviously they also wouldn't be able to download anything onto the host OS, but I'm guessing that's the whole point of this exercise
Is this a dedicated machine or just a family PC used by everyone? Is this also gaming PC? Is it used for for office / coursework as well as surfing the web? If the answers to most of those is 'no', if your family have games consoles and aren't dependant on MS Office, essentially the PC is just used for surfing the web and you're happy to try other Office products, then it might be worth considering dual booting the PC with Linux (eg Mint) installed and see how they get on with that. (you're less likely to need an AV in Linux).
Failing that, your other option is to install a better AV on your desktop (not sure what you're running now), disabling uPnP on the router (so you can manage which applications try to punch port forwards on your router - thus allowing you to disable the use of bit-torrent and all the other P2P clients that are known to have dodgy content mixed in with the fun stuff), and possibly even install a web proxy with some parental features (eg a web firewall to block dodgy sites). In fact, another option might be to use OpenDNS as your DNS servers and set up the parental features on there.
I'm not convinced running a browser in a VM is really fixing the issue, there's a lot more you may be able to do to secure your host OS before you need to think about running your browsers inside VMs.