We have been to WDW for each of the three weeks over the past three years. In 2011, we went Dec 16-23, or the third week. The parks were noticeably busier each day. The last two days were miserably busy. I wouldn't recommend the third week of December.
In 2012, we were at WDW Dec 9-15, or the second week. This week was great!!! Very little lines to wait in and the parks were not busy at all. We choose the second week because traditionally you can count on school football and cheer competitions I think. There are more high school kids there for the competitions during the first week.
In 2013, we were at WDW Nov 30-Dec 7. Because Thanksgiving was late last year, the football competitions were held in the second week of December. While it wasn't really busy, it felt just a little busier than the second week of Dec in 2012. But it was still a great time to go. We didn't wait very long for rides.
Based on our experience, first and second week of Dec are the best time to go. In factoring the free dinning, consider that you will pay full room rate in exchange. Just compare if the discounted rate would save you more. I think every family is different in this respect, just based on family size, eating preferences, and the resort you intend to stay. I haven't looked at the numbers for this, but I would guess a family of four staying at a value resort would realize savings with free dinning more than a family of 2 or 3 staying at a Deluxe.