Hey Carol,
I think using the points there would be a great idea. Especially for the cost of hotel rooms in London. My DW and I stayed there this past August and like other posters have said it is a great hotel. Very nice and upscale and the service is wonderful. As far as kid-friendly, I would say it is not kid-UNfriendly. It is a upscale hotel that caters towards the wealthy and business people (at least that is the impression I got from my stay). However, at the same time, while we were checking in and during our stay, we did see many families and kids around in the hotel.
But the rooms are well adorned with some nice amenities. I checked out the cost of the room if we paid cash and it would have been roughly $700/night with the exchange rate at that time. And the room we had was the second to cheapest room. Also, as we were walking into the hotel there was a Lamborghini, Bentley, Mercedes, and Ferrari parked out front. So, that will give you an idea what type of place it is. But again, the service was wonderful and the location we thought was great (we were visiting my wife's old stomping ground in Kensington). And getting busses or on the tube was no problem at all.
But knowing what type of hotel you would get if you paid about $150/night in London, I would HIGHLY recommend using your points at the Royal Garden. You won't be dissappointed. I know that is what we will be doing next time we go to London.
Best of luck.
Oh yeah, as far as connecting rooms, I'm not sure if they have them. I know our room did not have a connecting door to another room, but that was the only room I saw out of something like 450 rooms (if not more). So, take that with a grain of salt.