First of.. I am not a small child. I do not have small children, nor have I borrowed any to see if they like this book. However, I do read a lot of "children's" books - from preschool stuff to teen-lit, so I feel I can comment.
And I like this book.. it has all the core requirements of a good kid's book - a likeable heroine (the tomboy mermaid of the title), some disapproving relatives who are won round to the heroine's point of view by her good actions, and a touch of danger and excitement (the Pirates, in case you couldn't guess).. The illustrations are charming and well placed in amongst the text.
Its well written, with good dialogue and lots of action, and some sly bits of humour to keep an adult interested.. all in all a fun read!