We've had great experiences with Kids Nite Out. Our younger DD is still too young for the clubs, and we don't want to split up the girls (never mind that it would be way more expensive!), so we're using KNO again this year.
If you decide to use KNO, I'd recommend booking in advance, to be on the safe side. We have booked after we got there, but I feel a bit better knowing we have a reservation ahead of time and won't have to cancel a special date night ADR! You can put in your details (obviously without the room #) on the online reservation request system, and they'll call you within a few days to confirm your details and guarantee your reservation with a credit card.
I also take that phone call opportunity to request the demographic of babysitter we'd like (we ask for college-age female to match the type of sitter they're used to at home). We've had both the "college" and the "grandmother" type and have had great success with both, so I don't at all think of this as a question of quality differences - just what our girls are more used to.
The sitters can take your kids anywhere on resort property *except* water areas - the pool stuff is, I think, just off the charts on their liability insurance.

But they can walk around the grounds, go to the restaurants, play on the playgrounds, or just stay in the room and hang out. If you're at Swan/Dolphin/Boardwalk, I think they get the run of the Boardwalk (read: ice cream!). The sitters come equipped with age-appropriate activities, too, which is great. We usually run to the CS location at our resort and bring back dinner for the girls or order room service, depending on the circumstances that day.
KNO charges $16.50/hour for 1 child and $18.50/hour for two. It goes up from there for more kids, but I think there is a cap at some point.

There's a four-hour minimum and a $10 transportation charge. You sign off on your final bill when you get back to your room, at which point your sitter will also have written up a short summary of how your kiddos passed the time.
All in all, we've been extremely happy with this service. We're looking forward to trying out the clubs when DD3 is older, but I also like that, with KNO, they can go to bed in their rooms at something resembling a normal bedtime.
Good luck, and have fun!
XO
Liz