For us its a no brainer. We got 45% off rack rate and free dining for OKW for july 1st -14 th 2012 Total price for 4 adults = $2536 not including park tickets.
So here's how I work out if its worth it. When we are trying to do it as cheep as possible we stay offsite and only do 2 disney special meals
I stay offsite (villa we have booked before) (infact prefer it to disney) = $960
breakfast in villa =$100
lunch 1/2 in villa 1/2 at parks = $336
eat dinner at villa 4 times and out 10 times =120+ 1300 = $1420
drinks to take into park $100
snack/icecreams/ additional drinks - $120
total = $2936 not including park tickets
So I save about $400 by doing the free dining even if I stay offsite - I would be saving a lot more if I was to compare it to staying at an on site moderate hotel and more again if it I was to be staying in OKW -which I am
Free dining would not be worth anything to us if we infact paid out more than we normally would, even if it meant we had more/better meals out - moneys too tight at the minute
So here's how I work out if its worth it. When we are trying to do it as cheep as possible we stay offsite and only do 2 disney special meals
I stay offsite (villa we have booked before) (infact prefer it to disney) = $960
breakfast in villa =$100
lunch 1/2 in villa 1/2 at parks = $336
eat dinner at villa 4 times and out 10 times =120+ 1300 = $1420
drinks to take into park $100
snack/icecreams/ additional drinks - $120
total = $2936 not including park tickets
So I save about $400 by doing the free dining even if I stay offsite - I would be saving a lot more if I was to compare it to staying at an on site moderate hotel and more again if it I was to be staying in OKW -which I am

Free dining would not be worth anything to us if we infact paid out more than we normally would, even if it meant we had more/better meals out - moneys too tight at the minute
(using NO military discounts, just free dining).
Compared to no discount, it is significant savings for us (like 1600 bucks!) since we would get dp without it. It really does help to do the math for your family and situation.