henrydog, we are in the middle of booking a DIY Flydrive to Florida for the beginning of August. We thought long and hard about whether to book beforehand or whether to be 'free spirits' (it's us two and our youngest daughter who's 15)
In the end we decided to do a bit of both. We booked a hotel for the night we arrive (Miami) but then have a free night so we can choose to drive up to Orlando via the Everglades and west coast, or up the east coast via Palm Beach. If we find somewhere we really like the look of then we'll stay there. There are so many motels along the main roads, plus you can often pick up magazines with discount vouchers at restaurants, gas stations etc. Plus the internet is a good resource to find places.
We booked our Orlando accommodation, 4 nights very near the entrance to WDW, then 2 nights in a Universal hotel so we can use the 'front of the line' perk.
We've then got another free night before we arrive in Key West where we've booked 4 nights in a Bed and Breakfast in the Old Town (that was found after hours of looking on the Internet!)
Then it's another couple of free nights before we fly home.
This way we know we've got some decent places to stay plus a bit of freedom to be a bit adventurous!
I guess it depends on how old your children are and how they would cope with possibly spending some of your holiday time trying to find a bed!
Incidentally, all our accommodation has been secured with a credit card but we can cancel up to 24 hours before our expected arrival with no penalty, so although we've made these bookings we can always cancel if we find another option en route (although I don't expect we will)
As for prices, how long is a piece of string?!? It depends what kind of place you want! As a guide, our hotel near WDW is $35 a night (it was a 'special'), the Universal hotel is $164 (and that was discounted!), the B&B in Key West is $99 and our Miami airport hotel is $55. They were all good rates for that particular place.
(It also helps that I'm 'obsessive compulsive' about planning holidays and have spent HOURS on the internet.)
Re. having an address for immigration, I read in the Rough Guide that this is a first night address. I hadn't heard that it was for the whole trip (but may be wrong!)
Whatever you do, enjoy yourselves!!