Probably the best of all the on-site Disney World hotels is the elegant Grand Floridian. Built with the Victorian opulence of the old Florida hotels this is the "Grand Dame" of them all. Located on the Seven Seas lagoon about 2 minutes from the Magic Kingdom by monorail it has several hundred rooms, 7 restaurants, 2 pools, and a full service spa (currently under renovation until 2013).
The Grand Floridian doesn't come cheap. Room rates range from $460 a night (2 queen beds) to $1660 a night (Victorian Suite). There are several bars and nightly entertainment. It also has loads of activities for the kids like swimming, beaches, pirate adventures, arcade, character dining, and more.
We've only stayed there once in it's 20+ year history. It's pricey for a family of four but quite worth it to say you've done it once. I an say it will take your breath away. It's that beautiful.