We spent the entire NYE 09-10 in MK, getting up at 5:30 AM, on the bus by 6:15, arrive by 6:30 for the 7:00 AM opening. We didnt have any kids with us. It was just me (23) and my brother (19), so we had a lot of energy and I would imagine it would be more difficult to get through the day with young kids. On the other hand, if your kids are used to being in the parks for long days on other trips, this day might not be that much worse if you break it up with breaks and meals. First off, be sure to make your reservations for whatever sit-down restaurants 180 days in advance in order to make sure you get the times that you want. I recommend doing what we did, an 11:00 AM or so lunch, and a 4:30 PM dinner. They were nicely spaced out, and we got out of dinner just in time for the 6:15 PM castle lighting which is not to be missed. I cannot emphasize enough that you must pick at least 2 table service meals for this day. It will be expensive, yes, but I cannot imagine being in the park all day and night without having had two substantial, sit-down relaxing meals. If you want reviews or advice on the two restaurants we picked, let me know and I can go into further detail.
While waiting around, if you plan to be in a good spot on Main Street for the fireworks, you need to really be in the area by 6:15. Try to secure a spot near the curb so that you and your family can sit down. We were lucky enough to be able to be near the curb and then another family with young kids couldnt wait anymore, so they left and gave their curb seats to us and we guarded them the rest of the night. The Disney cast members will not let you sit in the middle of the street or walkways until the fireworks actually start, so you really need to get a curb seat early and stay there the rest of the night. The good thing is, with a family you can take turns sitting as long as at least one of you is holding down the fort and guarding the spot, the others can go off to the bathroom, get a snack, etc. There is a lot to keep the kids attention. At 6:15 is the castle lighting ceremony. Then there was a Spectro Magic parade at 7:00, Holiday fireworks at 8:00 PM, then another Spectro Magic parade at 10:30, then the fireworks again at 11:50. The last hour and a half was so energizing, by then everyone knows they made it waiting all day and night, everyone is blowing their horns, there is a DJ and lights up at the castle, it was really fun. So all of that definitely helped to pass the time.
As far as recommendations for the earlier part of the day, I recommend getting to the park at 7:00 AM when it opens, and use those first 4 hours or so getting all of your rides in before the lines turn insane later in the day. Throughout the day, there are tons of extra things going on that arent available on regular park days. There are extra parades, activities, and more to keep the kids entertained throughout the day in addition to the attractions and taking time out to eat. We did the Celebrate Street Parade, Mickeys Once Upon a Christmastime Parade, some other Christmas character filled show on stage at the castle, and there were several other things scheduled too. So there really is a lot to pack in the day.
Oh, and one last tip, dont plan any park for the next day, January 1. If you do end up staying all the way to the midnight fireworks, the line for the buses is super long whether you leave at 12:00 or 2:00 AM. We left at 1:30 and didnt get back to the hotel until 3:00. So the next day, we just relaxed all day and it was very much needed. That and because we needed time to recharge before our
Disney cruise the next day!