My oldest two are 8 and 10. Last Tuesday they stayed home alone from about 11-415. The sitter took the 6 year old to his old babysitter's house when she left at 11, and I went home at 12 for lunch, stayed until 1. So they really had maybe 3.5 hours alone.
When I got home, the house was cleaned, laundry done, hamburgers put together for dinner, etc. They did GREAT! That was the only day they had to stay home alone for a few hours, but they will also do it today, Thursday, and next Tuesday. They are in VBS this week until noon, so only 3-4 hours each day. I will take a late lunch on the days they are home to break up the time.
My daughter (10) and son (8) argue sometimes, but it's very rare. I would not leave the 6 year old home with them yet even if it was legal.
As far as the walking home from school...I was doing that in 4th grade, but it still would scare the beejeusus out of me now (sorry if I misspelled that). I just don't trust other people. What about if you try it a few times and see how it goes? Do they have cell phones? Do they know to call when they are home?
It really depends on their maturity level and your comfort level, as well as theirs. I think it's okay if everyone feels confident.