We did a photo session back in the Fall of '02 using the (then) Disney Club discount.
The session can take place at just about any location on WDW propertly EXCEPT MGM Studios. You get full access to a photographer for one hour. He will take as many photos as you want for that period of time, and you get all of the proofs as part of the Sitting Fee. I believe that they are now posting photos on-line so that you can access them electronically, but that service was not offered when we had our session.
One of the nicer settings is Epcot. The photographers have access to the World Showcase before it opens at 11am daily. So, in an hour's time, there is ample opportunity to take photos in at least 3 different international settings.
If you pick the Magic Kingdom, due to the crowds, about the only place they can really set-up is in the rose garden with the castle in the background. That probably makes for the most "Disney-ish" photo, but realistically you could probably get as good a photos buy asking a passer-by to use your camera.
We elected to have the photo session on our check-out day, and just did it over at Old Key West. We had about half of the photos taken indoors near the bookshelves in the registration building. The rest were out on the porch to give us that "outdoor" background.
I understand the Grand Floridian, WL and AKL are also popular resort locations.
Our experience was very favorable. Yes, it was a bit pricey. But the service was top-notch and it was nice to get some photos with the entire family--our son and my parents included.