We just did this in April. Loved it! Daughter was 7 ... it was very cool to feel the dolphins.
I think the observers can take pictures, but they aren't allowed on the platform, so the pictures are from behind and they might not be that good. The encounter takes place on a floating square platform in the water that is shaded. The observers stand to the back of where the encounter takes place. They can see just fine, but they see the backs of the people with the dolphin (the dolphins would face them when doing the hug.)
That says, the place puts it on video (not really worth it) and they also have pictures (very worth it.)
Definitely try to get the early excursion if you can. After the encounter, you can walk around and explore blue lagoon. I know this is terrible, but I actually thought it was more beautiful (and more enjoyable) than
Castaway Cay (GASP!) A picture from that day is currently my computer background. The water is similar (turquoise blue) and they have lounge chairs everywhere - the diff w/Castaway Cay is that is isn't so terribly crowded.
We had a fantastic time... enjoy! I would also recommend getting an underwater camera. We got the Sony Cybershot with a flotation strap from
amazon. It was around $300 and it was the best pre-cruise purchase we ever made. It takes HD video and is drop proof, freeze proof, water proof and sand proof. Suddenly, I don't mind handing this camera to my daughter. The underwater pictures were incredible. Takes great panorama pix too.