I definitely recommend the dining plan, and definitely recommend booking your dining reservations as early as possible (you can start booking six months in advance).
We've stayed at the Port Orleans French Quarter and Port Orleans Riverside and loved both. Riverside is a bit nicer, with a REALLY nice cafeteria that has things like chicken fingers, cheeseburgers, pizza, pasta (you pick the ingredients in your sauce), turkey/roast beef with mashed taters & fixin's, specialty salad where you pick the ingredients, and a super dessert area.
We ate at the following last time:
Polynesian Resort - Ohanna's - Luau dinner - loads of fun for the kids with limbo and other games. Good food, and a view of the fireworks if you eat later.
Polynesian Resort - Ohanna's - Character breakfast. Breakfast was the same food as the resort but had Lilo & Stitch, Mickey and Pluto. Pluto gets right in the kids' faces, so mine didn't like him but liked the rest.
Grand Floridian Resort - Park Fare - Character breakfast. Breakfast is a buffet and was fantastic. Alice in Wonderland, Mary Poppins, and the Mad Hatter were all super nice. Pooh and Tigger are fun. We'll definitely do again.
Epcot - Living Seas Coral Reef - Upscale dinner. Was fun, but wouldn't do again. The view of the aquarium is alright, and the food is good but the whole atmosphere is a little snobbish, so wasn't as fun for the kids.
Epcot - Biergarten in the German Pavilion - SUPER FUN! Polka band comes out on the hour (not sure if it's just after 5) for 15 minutes and we had a great time dancing on the floor with our girls, and the buffet is great. Huge steins of German beer for $7.
MGM - Broadway and Vine? - Character lunch with the gang from Jo Jo's Circus and Young Einsteins. Characters were really nice, and the food is really good. Lots of great sandwich fixin's and other good food, which was a nice break from the same type stuff. We ate at 11:45, I think, or whatever the first lunch reservation was and got to see all the characters and take pictures within the first 10 minutes. Plus they have really fun people who dance with the kids and sing.
Epcot - Akebaush (?) Dining Hall in the Norwegian Pavilion - Buffet and sit-down lunch with Cinderella, Mulan, Aurora, and Jasmine. Loads of fun, our girls loved it. Next time we'll have breakfast with Snow White there. :)
Next time I'll also book the Whispering Canyon Café because it's supposed to be super fun. The wait staff is kind of crazy and I guess sings a whole song if you order catsup and has stick pony races for the kids and all. They do throw your straws on the table and act a bit rude as part of the act though.
Check out allears.net for some good reviews on dining, resorts, and rides.
We bought the park hopper passes and I won't do that again for awhile (I'll just get the regular one day ones) because my kids weren't crazy interested in staying non stop at the parks - ages 3 & 6.
We also flew down then used the Magic Express bus to take us to and from the resort, and used the bus/boat/monorails to get around with no problems. Plus dropoffs right by the gates.
Hope that isn't too long, I'm sure you'll get blasted!
Have a great time! There's no vacation like a Disney Vacation!