We were there from the Wed before until the Sunday after MLK weekend and didn't find the crowds to be bad at all. There was a noticable uptick from Friday to Monday of the holiday weekend, but still not bad using Fastpass. And we're the family that knowingly does everything wrong when it comes to touring plans - we're not morning people, so we didn't do a single rope drop, and we tour to minimize mileage rather than to cut wait times.
The weekday crowds were lower than our week before free dining trip in August 07, and much lower than our opening week of Food & Wine 05 trip. The weekend crowds were about on par with Aug 07 and still lower than F&W 05.
One piece of advice that doesn't apply for other times we've visited (Aug & Oct) - take advantage of the late EMHs and the late closings over the holiday weekend. All the thin-blooded southerners on weekend holiday take shelter from the "cold", which isn't cold at all to those of us who leave behind snow and ice to be at Disney. We had the parks practically to ourselves for evening EMHs, the Pirate & Princess party, and even on Saturday night over the holiday weekend.
All in all, I wouldn't hesitate to plan another MLK trip, and probably will at some point in the future since DS's birthday is that week and Disney birthdays are a favorite of both my kids.