Hi hillsey and welcome to Rootschat from me too
Hi Tati!
It was quite common for surnames to be written in a variety of ways, especially if the parents were illiterate; the registrars would have written down the sound of the name as they saw fit.
I think the birth registration for Michael WALLECE that Tati found may be James's brother; there is also a birth registration for Ellen:
From FreeBMD Ellen WALLACE, Jun Qtr 1867 Lambeth Volume 1d Page 427
And a possible for James:
From FreeBMD James WALLACE Jun Qtr 1870 Lambeth Volume 1d Page 453
However, familysearch have a number of submitted (ie individual people have uploaded the information to the site; these would need checking out) entries for a James WALLIS b 1870 to a Solomon Wallis & Ruth Bull. As you know the name of your James's father, and as there is a family group in the 1871 census that Tati found for you that corresponds with the information that has been handed down through your family, I would suggest you purchase one of the birth certificates. This will confirm or otherwise the children's parents, and should also give you the mother's maiden name and father's occupation.
I cannot see baptism records for James or his siblings, but it is possible that they were Catholic, as their parents appear to have come from Ireland, and the records may not have been transcribed yet. Some Catholic parishes did/do not like the idea of releasing their records to the public.
familysearch:
http://www.familysearch.org/eng/default.aspFreeBMD:
http://www.freebmd.org.uk/Kind regards
Gaie
Added: Hi Spidermonkey!