Free Dinning is definately the better money saver. Look at it this way.
A really good room rate will save you anywhere from $30 to $100 a night. You are only going to save toward the high end if you save at a deluxe. Lets take a six night stay. You higest amount of savings is going to be around $600 with a great room rate (I guess once in a while you can save a little more than that in a deluxe)
Now consider your food is free. You have a family of 4. I know some of you are saying it is too much food or you do not like the comittment of a TS, but remember you do not have to order all the food and you can switch TS for CS if that is better for your family. Now if you paid for the dinning plan you may not want to do that, but remember that it was free so who cares if you do not get the best value from it.
All in all the free dinning is going to be a better savings if you stay in a value or moderate compared to what you would get in room rate savings. With a deluxe it depends on what your plans are.
My husband and I and our 2 year old once took a budget trip, we tried to save all the money we could. we had 3 sit down meals, 2 character breakfasts and fantasmic at Holywood and vine, We choose these as there was no charge for the little one and the breakfasts were cheaper than other times of the day. We made our Character breakfasts at the last PS offered and called it lunch. We ate all breakfasts in our room with granola bars etc..., the rest of the time we split counter service meals with no dessert and had 2 or 3 snacks during the week. We drank no alcohol. We still spent $500. We were staying in a value with a discounted rate. It saved us about $200.
During the free dinning plan offering We stayed at a moderate at rack rate, and ate anywhere we had wanted. We did drink alcohol. We only spent $100 or less beyond the dinning plan. This time our child was 4 and had to have a park ticket and has a big appetite. Our total trip cost was about the same or less and that included the extra cost for our child and having a much better trip in our opinion. (our total of food receipts from our dinning plan was $980 and that does not include the fact that we would have had to tip on that as well)
If they ever offer free dinning again (which I am not expecting) We are totally going. Food is a big expense on vacation.