Hi Deb, I am also just now learning all about APs and their discounts. Here is some information I found on
www.mousesavers.com (great website!):
For a surprising number of people, an Annual Pass is the most economical choice. Generally speaking, if you will be going into the Walt Disney World theme parks for more than 8 days in a year, an Annual Pass is well worth considering.
Remember, an Annual Pass is good for 366 days, so if you take an annual vacation to Walt Disney World, just make it a little earlier the second year, and you can use the previous year's pass. For instance, if you vacationed April 8-14 this year, come back next year from April 1-7 and your passes will still be valid.
When you consider the substantial (up to 45% off) hotel discounts and discounts on entertainment that are often available to Annual Passholders, you may find it's worthwhile to purchase at least one Annual Pass for someone in your party. In fact, it's sometimes possible to save so much with Annual Passholder hotel discounts that it makes sense to get an Annual Pass for stays of as little as 3 nights! Click here to learn more about whether an Annual Pass can save you enough on your room to justify a purchase. Be sure to read the Frequently Asked Questions about Annual Passes, too.
If you are a Florida resident or have Military ID, there are annual pass discounts for you -- see the appropriate section.
Here is a FAQ for APs on mousesavers as well:
http://www.mousesavers.com/faq.html#ap
Hope this helps... I've got some questions about APs myself.