There are several settings, and several characters, to take into consideration, and the effects on each of them are different.

The most obvious "setting" of the story is the nursery, and specifically the simulated African environment that exists inside of it for much of the story. This setting unnerves the adults; Mr. Hadley and McClean, the psychologist, are noted as sweating each time they are in the sun for a few moments. The landscape, in McClean's words, communicate hatred, and it is likely that the hatred was directed at the parents, which is why it feels so much more oppressive to them than to the children.

The children, on the other hand, seem to flourish in all the wrong ways in this setting. It reinforces their hatred of their parents, their entitlement to ownership over the nursery, and their degeneracy to uncivilized thought and behavior.

The house acts in a similar way on both groups. While the parents enjoyed the automated comforts the house provided, they begin to feel uneasy and out of place. The children, not having known life outside of these comforts, see them as an integral part of their lives; they accuse their father of "killing" the machines when he turns them off, indicating a complete lack of understanding of how machines and humans can and should interact. 

Thus, both settings draw the children further away from their parents, and humanity, while both settings unnerve the parents, largely because they remember what life was like "before" those settings came into their lives, and they can see the detrimental effects.