I asked this same question before our trip last week... Here is what I found:
We stayed at POR last year, and in Windsor HIlls this year. We stayed in a house with 4 BR, 4 Baths and a pool in the backyard. The house was the same price as 1 bedroom in POR...
Pro's of staying on-site
1) You are part of the Disney experience 24/7. When you stay off-site and leave the park, I think it is much harder to go back. When we were off-site, I didn't feel as though I was a part of Disney all the time. Some people like being able to separate at night... I personally didn't like it.
2) If you don't know what time a park opens, or when parades are... you can just go to the lobby and ask!
3) You get the "gaurantee" of the cleaniness and comfort of a disney property. Not that you can't find it off-site, but it is more of a risk...
4) You get cool souvenir shops in the hotels
5) The pools and such are done with such nice theming!
6) You don't have to look at all the very cheesy souvenir shops, like the ones with a big mermaid head or magician's head sticking out of the top. I really don't like that atmosphere. It just seems a little less classy!
7)
DDP, and EMH!!
Here are the pro's of staying off-site (in my humble opinion)
1) Much more room for your money. Room to sit down and eat breakfast, more room in the pools (our resort pools have been so crowded at times that you cannot find your kids... no kidding). Separate rooms for kids and parents.
2) You have a few more dining options readily available to you.
3) Refrigerators, kitchens (in our case)
4) Money free'd up to do other fun things...
If you can't tell, I think I would prefer to be on-site, but I tried to think about the fact that I was saving our family $100.00 a night by staying in the house (we shared it with another family), and we could put this money toward other fun things at the parks.
There, you have it! I hope this helps you in some way!!