Although the average new car is priced somewhere in the upper 20's, great cars can certainly be had for less than 20K. The Milan and the similar (and less expensive) Ford Fusion are certainly worthwhile but if you're looking for a lot of options, you might need to go with a more stripped-down model, since the Fusion starts around 18K.

To narrow down what you might like, it would be nice to know where you live (i.e., a congested city, snowbelt area, etc.) and also if you would consider leasing and/or you don't mind the immediate depreciation hit on a new car. If you are consider a resale vehicle, several manufacturers offer certified pre-owned programs on their entire range and give them a comprehensive warranty but they have already taken much of this depreciation hit.

Based strictly on the priorities you have listed, however, I have posted some reviews. These will cover general price ranges and, in some cases, prioritize the vehicles on desire (safety, fun-to-drive factor, etc.). Once you find some vehicles in your range -- if you are consider ing new, especailly -- I recommend going to the manufacturer's website where you can "build" your car with the options you like and get a quote (this will usually be the MSRP -- Manufacturer's Suggested Retail Price -- for your area BUT, with the economy the way it is, there is a lot of haggling to be had and specials to be found!).
I am a car fanatic and have subscribed to three magazines -- Car and Driver, Automobile and Autoweek -- for several years. Their general consensus seems to place the Honda Fit at the top of the list for anyone seeking a reliable, roomy and fun-to-drive vehicle under 20K (under 18, for that matter!). Honda has a certified pre-owned program for all cars.

In my personal experience and from friends and family, you generally can not go wrong with a Japanese car but we have been in love with Volkswagens for several years. Even the ones not produced in their German homeland have a quality feel about them that is absent in most non-Eurpoean cars. They are also fun-to-drive, roomy, get great gas mileage and have high resale values. For these reason, my suggestion is either a VW Rabbit or Jetta (which are also available as certified pre-loved, in VW-speak).

I'm very pleased with my Nissan Versa hatchback (or wagon, depending on how you want to define it). The Versa was designed as a commuter vehicle with good milage (28-31MPG), but also to accommodate a group of people traveling. The back seat is very roomy for such a small car, and my group of 5 friends (all of us 6-foot plus, including my 6'4" associate) from work don't have any trouble going to and from places in the city when the opportunity arises. Is it as roomy as a Lincoln Town Car? Of course not, but it's also less than half the price and quite a bit more efficient.

I'm in a situation similar to yours; me, my wife, our booster-seated child and our infant, all go along happily. If you take care packing, it's never been an issue for us to go away for five days or so, or come back with presents, etc. Do I haul 4x8 sheet stock of lumber? No. Do I pull a boat? No. Do I spend $20 to fill up, less than once a week? Indeed.

Nissan has built a vehicle that performs well, and addresses the real needs of at least a segment of commuters and consumers. It is not all things to all people, but the seats are surprisingly comfortable and supportive (this coming from a kid who grew up wallowing in mom and dad's leather appointed boats) , and I grin every time I parallel park in a place my previous Camry would have been a foot too long to even attempt.

The Ford Fusion and Mercury Milan (same car, different grille and badges) are excellent options. They are roomy, well built and have very good handling. Another excellent in your price range is the Honda Fit. For a relatively small car, the Fit has an amazing amount of space inside thanks to excellent packaging. The rear seats have ample room of two adults or two car seats.

It also offers great utility with more cargo space in the back and easy access through the large hatch. In typical fashion you can fold down the rear seats for carrying large objects. You can also fold up the rear seat cushions against the seat backs leaving enough room to put in a large screen tv or a bicycle.

The Fit also has excellent handling and is one of the best handling affordable cars you can get. Here's a review I wrote recently.
http://www.autobloggreen.com/2008/11/10/in-the-autobloggreen-garage-2009-honda-fit-sport-5at/

About 3 months ago I did a lot of looking into cars for exactly the price range you mentioned. I am an entry level engineer and was in the market for a 4 door sedan with a lot of space. What I found might be of service to you as well.

I don't think you can go wrong with a 2005-2007 VW Jetta Wolfsburg edition. You can get them for approx $14000-$18000 and they will run forever. The trunk is massive...as is the backseat. The designers at VW made the choice to have the driver sit a bit farther forward in the car (not actual physical discomfort forward...just to have a smaller hood dimensionally) to have a lot of space for the backseat and the trunk.

The Jetta is quite safe and is one of the top 5 cars to best hold its value. They're also incredibly fun to drive and in my opinion really good looking cars. I think your average real world mpg for the 1.8T engine will be 26-32 mpg. The sticker may say something a bit more generic but the number I just gave is from friends who own the vehicle.

As much as I like the Jetta I did not end up buying one...I now drive an '06 Acura TL which I got for about $22k...about $6k less than retail. I was lucky enough to find out that my friend's dad has a side business where he has gotten a dealer license and gets vehicles at dealer pricing or less for family and friends. That being said though...I would definitely check out the Jetta.

I would get a used Subaru