That is the great thing about Disney Dining... it all caters to kids, so you really can't go wrong. Your kids will feel welcome anywhere (I wouldn't really suggest Victoria and Alberts, though!)
I would do a couple of character meals... perhaps a princess one for your daughter, and maybe Goofy, Mickey or Donald for your son.
As for restaurants...
MK: I don't really have a favorite restaurant in MK that isn't a counter service. For those, I like Pecos Bills and Cosmic Rays
Epcot: Garden Grille is alot of fun. The dining room slowly revolves, you can see the Living With the Land ride from it, and it has Farmer Mickey, Pluto, Chip and Dale on hand to sign autographs and take pictures.
San Angel Inn: kids love the decor... the market place is fun for them, and they like the boat going by the restaurant. My DD liked the cheese quesidilla... we told her it was a Mexican grilled cheese.
MGM: DD likes Mama Melrose (says they have the best spaghetti) and she feels like she is eating in the Italian restaurant where Lady and the Tramp are. She also really likes 50's Primetime Cafe.. the food is great, and the servers are so funny, and Hollywood and Vine, which is a buffet character meal, featuring Minnie, Goofy, Chip and Dale and Pluto. The buffet here is outstanding, and the service was great.
Animal Kingdom: our 2 favorite counter service places here are Tusker House and Flametree BBQ.
Resorts:
Polynesian: 'Ohana.. fun for the kids, great food for the parents. Kids can order from the Kona Cafe Kids menu.
Grand Floridian: 1900 Park Faire---breakfast features some of the following characters Mary Poppins, Alice in Wonderland, Pooh, Tigger, Eeyore, Mad Hatter, Bert. Dinner features Cinderella, the Prince, the mice, and the Fairy Godmother. We have done the breakfast and found it to have great food and great service. There is a wondeful buffet just for the kids with kid friendly items. Parents are welcome to eat from it, as well.
Contemporary: Chef Mickey's. Kind of loud, buffet OK, but the kids really get into it.
Cape May Cafe: we love the Clam Bake at night. Very relaxed, all you can eat, big sandcastle sculptures (my DD loves them) and a separate kids buffet. The dessert bar is one of the best anywhere! The service is good, as is the food.
Bon Apetit!