Everyone will tell you it "depends". They are correct.
We go every year to WDW and what resort we picks is different each year. We have stayed at all three levels.
This Jan we went and we actually downgraded. We had ressies for POFQ and found we could go to PoP and save over $700.
This trip it was just my wife, me, 2 kids (7 and 9) so it was very much worth it. PoP was a perfect fit for us and our needs.
However, our 09 trip is will be with the in laws again, so a mod fits that much better. Also if the kids did not go for any reason, the deluxe resorts are great for wife and I.
I never felt "cheap" or anything stay at the values. I enjoyed the savings, did miss a feature or two, but also loved the fact that my kids could be kids a the pool, or have kid attractive foods at the food court.