My wife, 4 month old and myself just came back from WDW in May 2000. We purchased an annual pass - the cost for two annual passes through the
Disney Store with a Disney Club discount was $1,026.72 or $513.36 Canadian each. At the Disney web site it is listed at $349 US and $469 US for the premium annual pass.
We bought just the basic annual pass which does not include the water parks. The premium annual pass includes the water parks. When I checked I believe I would have had to visit the water parks at least three times to break even with the premium annual pass. With a yound baby we knew we would not be visiting the water parks.
When we went to WDW in 2000 our 8 day length of stay pass cost over $1,200 for the two of us. So the annual pass was much cheaper. Also the benefits of the annual pass include discounts at some downtown disney stores, 20% discount admission to the water parks, some meal discounts, hotel discounts, 50% off min-golf, free parking at the parks and much more.
If you are thinking about buying one, call you local Disney store for the Canadian price and then compare it to the price from Disney in the USA. When we bought ours the savings was much higher here in Canada than in the USA.
I would advise buying a Disney Club membership. It saved us some money on our annual pass.
We bought the annual pass because we are going back in December for another 2 weeks. We can't wait!