When we told him we were going back to WDW, one of the first questions he asked was, "Can I go to the kids' club again?"
They are set up rather in the style of a large commercial daycare center, w/ rows of cubbies on the wall full of different types of toys. There are also tables and supplies for drawing and coloring, cartoons on TV, and Nintendo setups. There is also a "quiet room" where the kids can go and read (or be read to) quietly.
The atmosphere was very serene when DS was there. The CM's on duty are very professional and kept the children engaged. They will give you a pager to carry while your child is there, so that they can call you quickly if need be. There is a kitchen that will supply drinks, and the hotel caters a meal for the kids during the dinner hour, if you want to sign up for that, too. I think it is a wonderful bargain, and DS preferred it to yet another dull dinner w/ Mom & Dad.