There are two dining options that I think you are getting confused.
First there is the Disney Dining Experience (DDE) that is a discount card. This can be purchased for $75 by Florida residents or $50 for Annual Passholders. It gives you 20% off all meals and alcohol at most table service restaurants and a few counter services (basicly where there are no table service available). The discount is good for up to 10 people.
The second program is the MYW Dining option. This can only be purchased as part of a package - rack rate room for at least 3 days and tickets (at least one day). This costs ~$35/adult, $10/age 3-9 per night. (NOTE these are the costs for 2005 - it will likely be higher for 2006 - I saw one message that listed the prices as $38/$11). You have to purchase it for everyone in the room for all nights of your stay. You get a counter service credit, a table service credit and a snack per person per night. They are good from the time you check in until midnight of the day you check out. If you are staying on points you cannot get this option.
Now - as to whether they are worth it or which option to get - the best way for me is to look at All Ears menus, add up the cost of the meals you would like and compare the costs. For DDE, if you are already getting an AP, you need to spend over $250 at participating restaurants to break even. If you are not already getting an AP, you have to factor in the additional cost of an AP and see where the breakeven point is.
For MYW Dining Plan, ff you are already paying rack rate and were going to get your tickets from Disney, you only have to figure out if you can eat $35 a day - pretty easy to do - plus you will probably get more food on the plan. If you have a discounted room (
AAA or AP) and plan to buy discounted tickets from TicketMania or similar place, it will be harder to breakeven as you have to add the additonal cost for these things to the cost of the dining plan. Other people like the dining plan because it is paid in advance and they can order what they want with no concern for cost.
Bottom line, only you can decide if it makes sense for your family based on your eating habits and desires.