Unless your trip is at the end of August, you'll be in the peak season for DVC. So this will be 11 extra points per night for the weekend and 6 extra for weekdays (using the 2003 chart - it sounds like point costs have gone up for 2004). The 6 points/night doesn't sound too bad if you're only there for 2 or 3 nights. But if you're there for several nights or on the weekend, I doubt there's much extra to see that would make it worth the extra cost.
The only time I've stayed at the DL hotel was in the Marina Tower with the "view of
Disneyland off to the far right" as the previous poster described it. I reserved and paid (cash, not points) for a standard room, but we had a great view of the DL fireworks, so I thought that maybe we had been upgraded. But from what the previous poster wrote, maybe it was considered a standard view. If that's the case, I would go for that, although I don't know if you can specifically request "Marina tower on the side with the DL view". Every night we'd walk back from the late DL parade and get to the room about 5 minutes before the fireworks started - it was great (especially for my 5-year-old, who loves to see fireworks but can't stand the loud noise).
The hotel is at one end of Downtown Disney, the parks are at the other end. So you'll be in Downtown Disney almost immediately after walking out of the hotel (well, ok, it might be 5 minutes if you're at the farthest point and have to wait for the elevator for a couple of minutes). At the hotel end of Downtown Disney, there's a monorail stop that takes you to Tomorrowland. So if you're going to Disneyland, you've got about a 6 minute walk tops. As the other poster said, it's about 10 minutes to walk to the main entrance of both parks, which are right across from each other.