K.M.
We love Destin! You will have so much fun!
"The Back Porch" is a very casual favorite. It's always crowded, but don't let that turn you away- go to the back and enjoy a drink on the beach while you wait and people watch.
For nicer dining, you MUST go to Louisiana Lagniappe! It is wonderful food and the service is fantastic. (www.thelouisianalagniappe.com for directions) The dress code is a little more formal, but worth it!
Harry T's Lighthouse is another good place for casual dining. Reasonable prices for food, friendly folks there.
One place I would NOT recommend is FudPuckers. Total tourist trap and the food is horrible, the service is even worse. Take your kids to see the 'gators, have a drink and then LEAVE.
Places to stay... well, unfortunately, tourism is so big in Destin that any gulf front locations are going to cost a bit more.
The best way to find a place to stay in by using Vacation Rentals by Owner, www.vrbo.com. We have used this website extensively and for locations all over the United States. We have NEVER had a problem.
Just be careful with the lingo while you are looking: gulf VIEW means that you are NOT on the water, there may be a service road to cross.
"Steps from the beach" will mean that you have to haul your stuff a few blocks and hope there is space open at the public beach.
You may want to save yourself the hassle and go with gulf FRONT properties. They will have a private beach, beach service and a lot less hassle. It may stretch your budget a bit, but if you cook breakfast and lunch at your condo, you can save money.
You may want to consider a place with a pool as well- it's nice to have a place to go when the water in the gulf is too choppy to swim. It's also nice to go to a pool and cool down in the afternoon!
Have fun planning and have a GREAT time in Destin!