I've been several times. Stay on the Canadian side. The American side is just nasty, IMO. We prefer to stay in the Clifton Hill area just to be closer to the action, but the Fallsview area is nice too and close to many attractions.
I recommend the Niagara parks commission combo back that gives you bus privileges and admission to several attractions. The Maid of the Mist is a must do.
We usually go over to the American side for one day to do the park over there, its very nice and has a really cool attraction that lets you climb around on stairs at the base of the falls.
If you're a history nut like we are, there are forts on both the NY and ON side of the Niagara river that you can visit.
I'm also really excited to do the jet boat next time we go. I haven't yet, but it looks like so much fun and I think my kids would love it.