We taught our kids character through teaching them Biblical principles. We read the Bible to them and took them to church every week - and more often than just Sunday mornings. We also supplemented with Bible stories and a wealth of other books, not necessarily by Christian writers. There are so many ways to teach children to grow up gracefully. We even used television - how dare we?! :)
There are lots of television shows and movies which can also teach children to live by standards which demonstrate positive character, but we had to be selective. We were always very strict about what our children were exposed to.
I agree with the person who suggested role modeling. All the things above mean nothing if parents don't demonstrate quality character themselves.
Now, our children are 14, 17, and 19 and all three of them demonstrate knowledge, wisdom, and understanding in the decisions they make every day . . . well, most days . . . they are still teenagers. :)