Sherlee,
In my opinion, your 3-day San Diego, 4-day DL split is perfect!
We spent 4 nights in DL last year (and we go to DL frequently, at least for Hawaii-folk!), and it was a good amount of time to be able to enjoy everything at DL leisurely. If you haven't been there before, or at least since DCA opened, I think you will be pleasantly surprised at how much there is to see and do at DLR with the two parks, DD, and the three resorts. If you have a car and want to do something else non-Disney but nearby, you could always check out Knott's Berry Farm which is only about a 15-20 minute drive away. Even if you don't go into the park, they have a pretty nice shopping area (free parking if you're just shopping). I love the Snoopy store there!
As far as San Diego, yes, there are definitely lots of things to do there, and it's a beautiful place (most of it anyway!). I suppose it all depends on what you want to get out of your vacation. If you want to go shopping and you have the time, check out Horton Plaza. There's also a pretty good mall in La Jolla too.
As far as the drive, it's about 1 1/2 to 2 hours, depending on traffic, between DL and the San Diego area.