I'm going to disagree with the other posters so far. I think this is your baby, your son, and your baby shower, and you should do what feels most comfortable for you. My baby shower was co-ed, and there were children there too. That worked for us, and my best friend was thrilled to throw me a shower the way I would have wanted it. I think if you talk to your friend who is hosting, surely she will understand what is important to you, and plan accordingly.
As far as handling your son and possible jealousy, I would have the whole family there (you, your husband, and your son) and I would make as much of a big deal about him becoming a big brother, as others will make about your becoming a mommy (again). Get him a couple of special presents too - maybe some special books, a "Big Brother" t-shirt, etc. Also, if you decide to do games or some other activities, maybe there is a way you could involved him by handing stuff out, passing out prizes, or making sure all of the guests get their party favors. I think the best thing you can do is make him as much a part of this process as possible, and help him become as excited as you and your husband are.
Good luck, and congratulations on having 2 beautiful children soon!