I had a feeling when you were talking about an offsite hotel that you didn't mean the offsite ones just outside of the DLR gates, but ones closer to where your other activities are. If you want a hotel down in the DLR area, I am a big advocate of staying onsite.
IF you want the whole Disney experience from beginning to end and really want to immerse yourself, stay at one of the 3 DLR hotels. If you just need a place to rest your head and don't care where it is, then get a room at a Good Neighbor Hotel and save money. I have stayed at all 3 DLR hotels (multiple times since 1988 or so), and I cannot imagine ever NOT staying at one of them now. I live up in L.A., so a lot of fellow SoCal residents wouldn't think it's necessary to stay at a DLR hotel when we could just go home. For me it completes the experience and it is so nice when you are tired after a LONG day to just go back to your hotel onsite and conk out.
Also, there are
more perks staying at a DLR hotel than just getting the Early Entry/Magic Morning on the days it's available (it does come in VERY handy having that extra hour in the morning). You also can send whatever purchases you make in DL or DCA back to your DLR hotel so you don't have to lug them around the parks or rent a pricey locker. Also, being a guest at one of the hotels you can use your room key (Key to the Magic) to charge any meals or purchases, AND, more conveniently, you can use that key to gain access to the California Adventure entrance inside the Grand Californian Hotel (no matter which of the 3 hotels you are staying at). Non-hotel guests can only use that entrance later in the afternoon, but if you are a hotel guest and use it in the morning, you can usually enter DCA about 20-30 minutes before DCA officially opens, which is very important for getting in the line for Toy Story because they line you up in a spot inside DCA where you have a head start on all the people coming in through the main entrance of DCA and you can get in the TSMM line before they do!!!
Everything is close together over here - unlike in Florida - so it is easy and quick to get from the hotels to the parks' entrances. No buses or boats needed! I know people say it is closer in some cases if you stay at one of the offsite hotels, but you would be coming from a different direction. When you take the walk from any of the Disney hotels, you get to stroll through Downtown Disney and soak in the atmosphere on your way to the parks. It is more festive, and if you are a lover of Disney detail, it is fun to wander through the hotels and see the decor and then head to DTD and on to the parks.
The Paradise Pier is in many ways shinier and newer looking than the DLH, and it has a cute beachy theme, with pastels and suns and a surfing motif in the rooms. THe DLH is the original and is the most 'Disney,' but it is a little bit worn inside. However, the DLH grounds are beautiful - lovely waterfalls, great koi fish pond, miniature remote-controlled Jungle Cruise boats, Goofy's Kitchen, etc. And The GCH is the least Disney-fied out of all of them, but is the most upscale and elegant, and has all sorts of great woodsy, rustic touches around it, as well as a gorgeous lobby and the great Storytellers Cafe restarant. If you care about having that extra Disney hotel experience, DLH or PPH are the better choices. Otherwise, I would suggest DLH.
Anyway, if you look in my trip report (the link is in my signature below), you can read about my last two Paradise Pier stays and see pictures (I have actually stayed at PPH about 4 or 5 times since 2000). My October 2008 stay was NOT good. My December 2008 stay was good. If I could afford it, I would stay in the GCH more often than I have because of the convenient location, but I really think the PPH is fine. It is the least expensive, it is is cute, it's clean, it's bright - there is nothing at all wrong with PPH except for that it's NOT the DLH or the GCH!!! But it is fine as its own little hotel. It just doesn't have sprawling grounds on which to develop, but it's very basic and pleasant.
Also, since I am up in kind of a bustling area of L.A., I may be near some of the other places you are visiting, so let me know if you need any info on anything else up this way.
