I think it depends on your kids, their ages, and what you think they can handle. I highly recommend getting a copy of the "Unofficial Guide to Disneyworld" and reading it over before your trip. It can be overwhelming, but it's a great resource for knowing how the rides stack up and which might be a ton of fun, but more than a small child can handle. Some little kids think the Haunted Mansion is a hoot, others could be really scared. The nice thing about "Unofficial" is that it gives you different "touring plans" for hitting the rides while minimizing waiting in line. If your kids are small and all about going on Dumbo and Peter Pan and whatnot, it's best to hit those rides first thing, as soon as the park opens, because the lines will fill up quickly after 11, and it's not worth waiting 90 minutes to ride Dumbo!
Certainly, you will want to go on all the "super headliner" attractions, like Space Mountain, Tower of Terror, Soarin', etc. My daughter was 3.5 when we went to Disney World, and 4.5 when we went to Disneyland (which has many of the same rides). She loved all the small-scale rides (Dumbo, Peter Pan, Teacups, etc), Splash Mountain, It's A Small World, Tomorrowland Speedway, Buzz Lightyear's Space Ranger Spin, and the Jungle Cruise (all Magic Kingdom, didn't do anything "bigger"). She also liked Toy Story Mania in Hollywood Studios, Kiliminjaro Safaris in Animal Kingdom, and Soarin' and Finding Nemo at Epcot (which has Turtle Talk with Crush at the end). Obviously she wasn't big enough to do anything bigger, like Space Mountain or Rockin' Roller Coaster, and she didn't like Pirates of the Caribbean so much, but my stepsons went on them when we took them when they were younger (they were 6 and 7 and just tall enough) and loved it. When we went last year, they had Expidition Everest in Animal Kingdom and that was really fun. Kali River Rapids is good too, but you will get soaking wet! In Epcot they also liked GM Test Track, and in Hollywood Studios, Tower of Terror and Rockin' Rollercoaster.
If your kid has their heart set on riding Dumbo, it's fine if it's only going to be 10 or 20 minutes....but not 2 hours like some people will! Same thing for some of the smaller scale rides, like Peter Pan and Speedway - so not worth a 1 to 2 hour wait! Also, use Fast Pass wherever you can! It will save you a ton of time waiting in line!
ETA: Waiting in line to meet characters? Again, depends on your kid. Some are fine, some get really shy. Some are really excited and then at the end, chicken out! Or some, like my daughter, act all reluctant the whole time in line, then when we actually get up there, are totally fine! Again, just depends if you think waiting in line for up to an hour is worth it!
