We used Kids' Nite Out in Jan '08. We were staying at the WL. The sitter came to our room, and she was prepared with games and things for the kids. There is a four-hour minimum, and there is also a transportation fee. They service WDW resorts and other hotels throughout Orlando.
I was happy with the sitter and my kids had a nice time -- and they were asleep in bed when we got back! The drawback for me was 1) having to take time to feed the kids before she arrived and 2) she wasn't allowed to take them out of the room, for example for a walk or to the arcade (which I understand is for security and safety, so I'm not really complaining).
So, this trip we'll be using Simba's Clubhouse at AKL where the feed the kids and there's only a 2-hr minimum. The on-site kids' clubs at WDW are available to Disney resort guests, so I realize that won't help you...so in that case, I do recommend KNO. Let me know if you have any questions. You have to make a reservation by calling 800-696-8105. I think they also have a website.