We go to Pensacola Beach every year. They truly have some awesome beaches and our kids love it. There are a ton of things to do - sunset cruises to watch dolphins or rent a boat for a few hours. You can also drive to Destin for shopping at the outlets, visit the waterpark, or visit the zoo in Gulf Breeze (small zoo). I think there is also bumper cars or something like that.
If you do go -- you MUST go to my favorite restaurant - McGuires. Locals and tourists all love it. It's away from the beach, in Pensacola, but only a 15-20 minute drive.
The drive usually takes us about 11 hours. Not too bad. Might take longer this year since our little guy is potty trained and will probably want to go potty every 20 minutes (out of boredom).
You can usually find condos to rent on the beach or you can also rent a little house - they are usually a short walk from the beach or across from it. Check out Vrbo.com, like another person mentioned.