First, weather. Both October and December are much cooler than the summer months, thank goodness! Early October's typically pretty warm (mid-80s on average), later October's a bit cooler, but still usually warm enough for swimming at the resorts, if that's your thing. Evening temps are usually cool enough that you'll want a fleece or other light jacket, but shouldn't really be cold. December's a bit less predictable. You could find temps in the 80s or down in the 30s... or both in the same week! Average is more like mid-60s or low-70s during the day, with chillier nights. You might have swimming weather, but it's not guaranteed in December. I've seen a lot of recommendations that October is the "perfect" time to go, weather-wise. I just might have to agree...
In October, not only does Magic Kingdom have the Not-So-Scary Halloween Party, but there's also the Food & Wine Festival at EPCOT. I haven't done the Halloween party yet (but I will, this October!). I hear the Halloween party has a terrific vibe, though. It's the one time when adults are allowed to wear costumes into the park, which is kinda cool if you like to get into the Halloween spirit yourself. It's also when the villains who aren't usually out and about in the parks are doing meet & greets, which I think is pretty cool. The villains are often the most fun to interact with - even the ones who don't talk manage to play their characters so well! On the other hand, I have been to the Food & Wine Festival, and *really* enjoyed the experience. It's a great way to be a little more adventurous in your eating, because it's all small plates and little tastes, for a couple of bucks a pop. So you can try all sorts of foods from all sorts of cuisines (and new wines and beers, if that's your thing) as you walk around the World Showcase at EPCOT. Yum! It's a nice treat, especially for the adults in your group, though if your little one's an adventurous eater, he might enjoy that aspect, too! It's just an added perk to going in the fall, but it's something you can completely skip if that isn't your cup of tea...
Christmas decorations typically start going up in early November. MK will be fully decorated by the night of the first Very Merry Christmas Party (early in November), the rest of the parks + resorts will be fully decorated by the weekend of Thanksgiving. So if you go in December, you'll definitely see the World all decked out for Christmas! And there really is nothing like Christmastime at Disney World. (It does get insanely busy over Chrismas - New Year's Day, though.) The resorts, in particular, tend to shine when it comes to decorations - Animal Kingdom Lodge is beyond breathtaking when decorated, as is Wilderness Lodge, the gingerbread displays at Grand Floridian and other hotels are just amazing, etc etc etc. I have done the Very Merry Christmas Party - it was lots of fun. We did it twice - my son was 2 1/2 and 3 1/2 the times we went. He stayed up past midnight, at 3 1/2, to meet the 7 Dwarfs and ride Dumbo without a wait and see the parade and watch the fantastic holiday Wishes show/fireworks. It was expensive, and we probably won't do the Christmas party again, but we had a terrific time and are very glad we did it on our last two trips!
Our two Christmas party nights, almost exactly a year apart, couldn't have been more different, weather-wise. In early December 2011, it was FREEZING out at night - when it snowed on Main Street USA during the party, it was totally believable!! We were all bundled up in fleeces and jackets and wishing we had gloves! It was so cold, we even bought a warm, fuzzy blanket in the park to bundle around my son as he sat in his stroller - to go on top of his double-layer of pants + long-sleeve shirt + warm fleece jacket. A year later, in 2012, it was cool, but mild. We were comfy in jeans + sweaters and had no need of so many layers. (See what I mean about December being a bit unpredictable, weather-wise?)
Having already gone in December, several times, we're ready for a change of pace, and can't wait for our October trip. We're hoping to spend a little more time at the hotel this go-around, enjoying the warm weather and swimming in the pool.
But I don't think you could go wrong with either time frame. Either way, you're at Disney World, right?
