My DD has been several times, the first when she was 2.5, the last for her 5th birthday.
On her first visit, she loved the fairies in Pixie Hollow and the princesses at Fantasy Faire. We did lunch at Ariel's Grotto, which was also great. She found many of the Fantasyland dark rides to be quite scary, but loved Alice. Characters were a huge hit, although we rode plenty of rides, too.
In DCA, she loved Bug's Land (NOT the movie there) and the Muppet Vision 3D movie. She also liked the Paradise Pier rides (Golden Zephyr, swings, Jumpin Jellyfish, Little Mermaid, King Triton's carousel). It was during the construction-o-rama, so there was no Carsland yet.
On the second visit, she was tall enough to ride most of the thrill rides. Now, she's an adrenaline junkie! She loved Carsland, and still loved the characters.
We finally caught the Playhouse Disney Jr. show at DCA on our last visit, and she loved it. She also really enjoyed the parade, fireworks and World of Color. The little plays in the Fantasy Faire area are very enjoyable, and she had a blast at those.
It really is hard to go wrong with kids that age--but my biggest advice is to get there early (at least 30 minutes before park opening) and to take a midday break! You can get a ton of stuff done in the morning, and a break will keep everyone's mood pleasant.
when any characters came near him!! But did ok when we went back when he was 3!! So it depends on the child. 
