My children are 8 and 9 years old now and have been traveling since infancy. Since my husband works for American Airlines, it's always been a part of our lifestyles. I love giving advice on this topic because traveling is one of our favorite things to do as a family. We have learned so many things about each other and about the world. It's such a wonderful time to bond with your family. Personally, I can't think of a place that won't work for families. The world has so many things to see and do; it's just a matter of choosing. You could pick a place in your home town or could jump in a car or plane and go across the world. The time together is rewarding, no matter where you choose.
We have a timeshare and we have also stayed in many hotels. I will have to disagree with another moms opinion about packer "lighter" in a condo. I end up having to pack much more when we stay in ours because I'm including cleaning supplies, food, storage for food items, etc., etc. I love it, though, because it's usually much bigger and offers a kitchen (which saves tons of $ from having to eat out). It's a home away from home, which means you clean as you go. They are wonderful, though!
Personally, the easiest vacation is an all-inclusive. If you like the beach, Cancun is AWESOME and has so many inexpensive specials. I have never seen a child who doesn't like to go swimming. You have the beach, the pools, relaxation, activities, lots of wonderful food, kids activities (which you don't need at this age; a game of pat-a-cake and a coloring book goes a long way!), etc. It's very nice to have the option of going to a nice dinner with your husband for one evening and to utilize the childcare facility for an hour or two after spending a full day playing, napping, eating, swimming, building sand castles, etc.
Anywhwere you go to get away from it all and to spend quality time with interruptions is a wonderful place. Don't forget, either, that you don't have to pack it all up. It's rare to not have a Wal-Mart or something similar wherever you go. Even Maui has a Wal-Mart! Pack light, travel light, and just have fun.