Since your parents are coming specifically to help you with the kids, IMHO it's a must that you all be in the same resort, preferably with connecting rooms, or at least adjoining rooms.
Being that you're footing the bill for both rooms, a Moderate might be more comfy for your wallet. The four WDW Mods are all beautiful places, with peaceful, relaxing atmospheres, good dining options, and larger rooms than the Values.
I suggest two rooms at either Port Orleans Riverside, or Port Orleans French Quarter. Check out both resorts and see if they appeal to you, and to your parents. They both have good pools, nice restaurants and food courts, and beautiful grounds. They're also the closest Mods to the MK area, and are fairly close to Downtown Disney, too.
Transportation at the Mods is limited to buses, except for the boat from POR and POFQ that goes to Downtown Disney. Since you have two small kids and four adults, I also suggest biting the bullet and renting a car. A mid-size will probably do the trick. Rental rates for October are sky-high right now, but I expect them to come down later in the summer; at lease, I hope they will, since my upcoming trip is in late October, too! Having a rental car will give you a lot more flexibility, make getting the kids and their strollers back and forth a lot easier, and allow you to try off-site destinations for shopping and dining, too. It's also a HUGE time-saver, since you'll probably be leaving the parks each day to take the kids back to the resort, then return to teh parks for some Mommy and Daddy time.