Last year we were there August 16-21, and the crowds were really bad. For context, we were there the week Nemo opened in 2007 (2nd week in June) and the week before Easter this year, and those crowds were nothing compared to mid-August. We learned not to set foot in DLR past noon because it was just too painfully crowded. It wasn't just that the lines were long, it was also people everywhere - very difficult to get around. Evenings were like a sardine can - really, I mean, we couldn't even MOVE at times. It was horrible. DCA (as always) was much more manageable, and we love DCA anyway, so it worked out fine for us to hit the DLR rides first thing in the morning and then head on over to DCA before noon. DLR was so bad at night that we didn't even dare venture in for fireworks - we watched them from the plaza.
I am guessing that our dates somehow lined up with unblocking the APs (didn't know about that beforehand unfortunately), and if so, I can attest to the fact that those must be the worst days to go - avoid them if you can!!
Also, don't let the weather scare you off - we had the best weather of all of our trips in August!