Villa, even if it's only just the two of us in Orlando. We have stayed on-site and enjoyed it, especially when we stayed at the AKL, but all the space and facilities of a villa are more important to us than staying in a nice Disney hotel.
We have become used to a private pool outside our door; a full kitchen; laundry facilities; separate bedroom, dining space and living space; facilities such as an X-Box, a computer, broadband internet, DVD players; ease of parking the car in a prvate garage and not having to walk a couple of hundred metres to our room; etc; etc. Careful choice of your villa means that you can be very close to the parks if you want to (for example, our last couple of villas were closer to Animal Kingdom than some of Disney's own hotels), so being off-site does not have to mean long distances to get to the attractions. All in all we think villas are just perfect for us.
Regards
Rob