Our DS (4 almost 5) did it in October of 2007.
We did the cruise out of the Grand Floridian. You meet at the Dock at the Grand Floridian. (NOTE: The parents should stay there until the kids leave! Our son's cruise was delayed because there wasn't great communication at the Docks, another child's parents took off and didn't know they needed to sign a release. The CM's couldn't get a hold of the parents and the cruise was held for 20 minutes before removing the two children.)
Anyway they take off and sail around the Lagoon. They get cute hats ($7-$8 value for the pirate hats with mouse ears alone) and they eat PBJ for lunch. Coming back they match the children with their parent and the kids leave the boat one at a time. As they leave the boat they're given a little treasure chest with beads, some trinket rings, a compass, and maybe a piece of candy too.
Our son loved it! The treasure was mostly junk - but you know how kids that age LOVE junk treasure!