RE: my dog bit my daughter...
It is funny how times have changed. Years ago, it was understood that a dog should never be touched while it was eating. However, litigation and times have changed. Hell, the ASPCA automatically euthanizes dogs that show food aggression. I would not necessarily call this a "bad" dog per se, in fact, I like a dog with a little attitude. In today's society though, you need to realize that a pup like this could certainly be a liablity, both letigiously and in your personal family life.
It is really up to you. The dog is what it is. If you can handle such a dog AND keep your kids and neighbors safe, keep the pup. If you can't, send her back to the breeder and get another prospect.
For the record, one of my dogs is territorial aggressive (not food or dog aggressive though). A real sweet dog on the leash, but defends the home, yard, and car with vehemence. I understand this, in some ways apprecaite it, but I understand what situations have the potential to go bad, and make sure I am in control of them. Having a dog like this requires more vigillence on my part, and I know it, and accept it. I also understand that if someone other than a burglar ever gets bitten in my home or car, I AM RESPONSIBLE and will pay the price.
Its up to you and what you can handle.