I like Fantasmic, but it does have a lot of movie clips projected on water, which irritated DSis and BIL. They liked the show part of it and the spectacle part of it, but their feeling was that if they wanted to watch Disney movies, they have the DVDs at home. My children love it though, so we'll be seeing it again. I would not wait for two hours though...we always do the Fantasmic Dinner Package to avoid the lines.
I'm sure you'll have a great time whatever you decide!