From my expierence, 2 story is cheaper per sq ft.
A few other things to consider:
A 1 story house needs a larger lot. Further, a 1 story requires a flatter lot.
RE privacy, sound seperation from the kids, the "split floor plan" ranch is very popular here. The idea is that the master suite is on one side of the house and the secondary bedrooms are on the other side, with the living areas (family room, dining room, kitchen) in the center.
Another thing to consider is natuarl light. If the house you want to build is fairly large - say 3000 sq ft, for a ranch style home, there very often ends being a room or 2 that are interior - ie - no windows, whereas with a 2 story it is more feasable for every major room to get a corner with a window(s) on 2 sides.