We have been collectin Disney Dollars, preparing for our trip in May. I asked a CM what the difference was between the 2, advantages and disadvantages and here goes:
Disney Dollars,
Work like regular $$, you can US Currency back with these (if you wish to "cash out" if you still have $$ left over at the end of your trip)
Disney GiftCard, Works like credit card and are reloadable and you can add $$ to them at any time, so you can build a balance up like Disney Dollars (add $25 this week , add another $25.00 the next week). You cannot get cash back on card, you have to use entire balance (which means you could end up with $$ left over on a card, but probably not much like .34 cents or something) **But I was told that if you keep your reciepts of how much was put on the card and photocopy the card with a copy of # on the gift card, that they can cancel the card in the case that you loose it or it is stolen. You cannot do this with Disney Dollars and it might be a safer alternative depending on how much you were planning on bringing down.
Hope this helps,