young kids...disneyland or world?

I would say whatever is easier for you, meaning less travel time, less expensive, not changing time zones. With little kids you are probably spending the largest part of your time in MK so you can get a roughly equivalent experience in terms of rides and atmosphere out of both parks.
 
They are both fantastic. You can not go wrong with either. WDW you can stay at a value hotel on property for a budget trip. DL you can stay at an off-property hotel within walking distance. DL everything is within walking distance of each other which can make it easier with small kids, but I wouldn't let that be the deciding factor. With DD, we did WDW when she was 2 and 3 and it was great. We didn't go to DL for the first time until she was 4 or 5. With DL, if you want to do more budget food, it is very easy to walk out of the parks, grab something and go back to the park. We have never really done that, but I have seen the places as we drove into the area, and I know from the DL boards there people that do that. One thing to think about is the length of the trip. If you can do a week, then WDW is great. If you are only planning on 2 or 3 days, then DL is probably best since there are just 2 parks and everything is more compact. We usually do 4 full park days at DL, but you could get a lot done in less than that if you needed to.
 
The time zone thing I think depends on 2 things: the planned travel time, and each child's personality.

We planned our flight to DL for very early in the morning eastern...8:25am flight. We had to leave the house at 5:30am to get to the airport in time to go through security, get breakfast, etc. We pretty much took DD straight from her crib to her car seat, gave her something to drink in the car and started driving. The timing served a couple of purposes...

#1 - we were hoping with how early she woke up, she'd take a nap on the plane. (She did)
#2 - the timing of the departure meant we were landing around noon in LA. Even if she hadn't slept on the plane, it would be her "normal" nap time (she's usually napping at 3pm est), and it would have been fine for her to fall asleep on the drive to Anaheim from LAX (it's at least 45 mins w/o traffic, longer w/traffic).
#3 - the earlier nap time (whether on the flight or in the car) would help her be ready to go to sleep at an appropriate west coast time as well.

Basically, leaving really early in the morning helped to preemptively reset her body's clock to the Pacific Time Zone.

It was more of an adjustment for her coming back to the east coast at the end of the trip than it was heading to the west coast. But even then, we did our best to work with her timing. We left LAX around 10:30am, and arrived back east around 8pm. Again, the flight was over her nap time so she slept on the plane. She was plenty ready to go to bed when we landed..the hard part was making sure she didn't fall asleep in the car on the hour long drive from the airport to home.

But each child's personality does play into this as well. DD is a great traveler, and always has been. Car, Airplane..doesn't matter, she's pretty easy. If she were more difficult, then that would factor into my decision making process.
 















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