Well, there are plenty of options for character meals - and your kids will likely enjoy those the best. However, you might want to take advantage of sit down meals too, since it gives you a chance to relax and enjoy!
Crystal Palace - Character buffet that features Pooh, Tigger, Piglet and Eeyore. Located in the Magic Kingdom, they serve a buffet breakfast, lunch and dinner. They offer a large and varied buffet, that is sure to appeal to both kids and adults alike. You can find the current menus on this board and on AllEars
http://www.allearsnet.com/menu/menus.htm
Chef Mickey's - Located in Contemporary. Character buffet breakfast and dinner. Normally features Mickey, Goofy and Chip & Dale. My preference along with many on this board is the breakfast, however there are others that do prefer the dinner. Again, take a peek at the menus.
Coral Reef - Located in EPCOT. I find this a great restaurant for those with kids, since it features a 50' long by 8' high window into a mock Caribbean Coral Reef. They give you a fish spotting guide, so it's perfect for keeping the little ones busy. The Coral Reef is a sit down meal, and the menu (although a little short of sea dishes for me), still appeals to most. They serve lunch and dinner, and again the menus are online for you to review.
Whispering Canyon Cafe - Located in the Wilderness Lodge. I would suggest you read reviews on this one on the dining forum. I have to say we visited WCC for dinner last trip down, and although Duncan was too young to enjoy the games and comedy (ketchup anyone?!), we had a wonderful time watching all the other little kids relish the attention. Not to mention they let you have milkshakes instead of pop, so it was a nice change. Filling, but nice
'Ohana - Located in the Poly. Offers a character buffet featuring Lilo and Stitch. Dinner is not character, but they do offer coconut races and singing to keep the atmosphere going. 'Ohana has been taking hits in the dining forum of late for poor food quality... but I should point out since this is a first time trip, you might not find that the case. I think everything is normally so overwhelming when you've got little ones experiencing the magic for the first time, so it's best to try and make decisions for yourself.
Kona Cafe - Located in the Poly. Aside from wonderful food (I can say we've never had a bad meal or service at Kona), the Kona Cone is normally a big hit with kids!
Alright, I hope this gives you something to start with... I would suggest you take some time to read some of the menus at the link I provided above. Although menus will change, I am hoping you might be able to get some ideas on what places might suit your family. As it stands right now, no CARS related character restaurants, but Lightening and Mater do appear in MGM studios for photos
I think it would also help you to read the Dining Forum, since it's chalk full of reviews, suggestions and you can get details on anything specific. Above all, enjoy!