We celebrated my DD's 1st b-day at WDW this past July. We did breakfast at CRT. She could see the faces of the princesses & loved it. They brought a cupcake & sang to everyone having birthdays. We did dinner at Chef Mickey's & she was a little scared of the characters. They brought a cup cake & a laminated placemat the characters had signed. They sang there as well.
This June we will celebrate my DS's 5th birthday with breakfast at Chef Mickey's & dinner at Rainforest Cafe. (He picked these out.)
Whatever you do, take plenty of pictures. It will be a magical birthday.