If you decide where you are staying, how many people in your party and their ages, you should be able to decide what would work best for you, FREE dining or room discount.
We have 7 in our family, 2 adults, 3 disney adults, and 2 kids. We need rooms. We are staying at a Moderate Resort, even with the room only discount they offered (I think it was 30%, maybe 35%), we still made out better with FREE dining.
For one, no matter what we have to eat, even if I had to pay OOP for a few meals throughout the week, we still make out. WE always eat a sit down for supper, or at the very least 1 sit down per day. We would off the plan as well. So on average we could be spending about at minimum about $175 per meal, but mostlikely over the $200 mark, for sit down that is.
So for us, the room only discount would save us about $743 and the FREE Dining discount saves us about $1440 (I used the $175 per sit down), this is for 8 nights. And this is only Table Service Meals, throw in Counter Service meals, snack and free mug, It is a huge savings for us.
Do your research, decide for yourself what will work for your family.