We had lunch there in July 2010. We were a party of 10, including 4 children. My nieces were 9 and 6, and my sons were 3 and 5. All the children enjoyed it, and they had a special kids' menu for them. They also had the cold buffet for appetizers and salads, and everything on the buffet was delicious...and the children enjoyed quite a few of the foods on the cold buffet, like the deli meats, cheese, and salad. It's definitely a great choice for seeing the princesses. My boys are a little older now and specified to me that they don't want to eat with princesses on our July 2012 trip...but they enjoyed it when they were a bit younger! My nieces loved it there.
So, if you prefer to, then keep the dinner reservation. They are so good working with even the pickiest eaters at WDW. But if the adults are not so into the menu, then maybe it would be better to go for breakfast.
We had also eaten at CRT, and although we loved it there too, we all thought Akershus was better for the food, value, and character interaction. Overall it felt a lot less rushed and crazy...remember, so many people dream of eating in Cinderella's Castle, but not as many think of Akershus for princesses at WDW!