I did a pile of research before deciding to stay in a villa. I googled and vivisimo'd until my fingers were blistered.

There are all kinds of private owners out there with 3, 4, 5 and more bedroom homes, lovely and with varying degrees of quality (3*, 4* etc) and the rates are (IMHO) reasonable for what you get (our Lindfields villa [5 miles away] 3 BR, 2 bath 1750+ sq.ft., private pool & spa is about $1100 US for 8 nights incl. gas pool heat). Travel time is not much worse than bussing from parks to resort.
Not on-site but I think the space and the "away" time will be a good thing. Downside is the requirement for a car rental. Upside - freedom, flexibility and privacy. And I don't really care if we cook a meal - just as happy eating out...
Be aware. There's a new roadway (Western Beltway) connecting I-4 to the south, connecting with already completed sections north of 192 - scheduled for opening in December 2006.
Section 1 and Section 2 are the most applicable at dot-period-state-period-fl-period-us/turnpikepio/NewWebPages/western_beltway-period-html - its the link to Western Beltway Maps (sorry - apparently I'm not allowed to post links yet).
It runs adjacent to Indian Ridge, right through the middle of Indian Creek and adjacent to Oak Island Cove. All nice areas just west of WDW but traffic and traffic noise may be a concern. It certainly was for me in the final choice.
Pretty easy choice for me when I weighed the pros and cons - no disrepect to those preferring on-site.
Hope my 2¢ worth helps.