Stay on Disney property, but not necessarily a Disney resort. We just took my 2 1/2 y/o and WE loved every minute!!! We stayed at the Hilton next to Downtown Disney-- which is a great place to go after being at the parks all day and a little down time at the hotel. For the money the Waldorf Astoria would be my pick- cheapier than the Disney resorts with bigger rooms and amazing amenities! Check out the Disney Mom Bloggers on WDW's website... they have answers for questions that I didn't even think about.
Some of my favorite tips:
Don't skip out on EPCOT. You can meet every character in one spot (Mickey,Minnie, Donald, Pluto, and Goofy)... Plus each country in the world showcase has a craft for the kids. They collect, color, and decorate a passport. She loved it.
Do a Disney character dinning! We met the princesses at Belle's Breakfast in Norway. Absolutely Amazing with wonderful memories.
Speaking of memories, my batteries on my camera ran out but Disney has you covered. Everywhere there are photographers that use "Photo-pass" so all of your pictures can be captured together and already online to view, share, and purchase. But they lost a set of our pics and I didn't even take a backup with my iphone :(
The line to meet Rupunzel is always long- good luck during an off season would have been better.
You can bring snacks into the park!!! You can bring in a whole cooler and they have lockers available!
Get a "Celebrating 1st Visit" badge from City Hall on Main St USA (Magic Kingdom. Also don't miss the Celebrations parade daily at 3pm. My favorite spot was the circle patch at the front end of Main St facing the Castle. You could view the whole parade, loop around, get really close and shake hands/ high fives, and get pics with the castle in the back ground.
Ok, now I want to go back!!! What memories! Have fun!