Hi Tiffany!
Our family stayed at Coronado for Christmas 2008 and had a BLAST! Your kids are going to love the playground and Dig Site pool area. But bring your shoes, the resort is massive!
You can't go wrong with any of the dining plans. The question will come down to budget, and how much you plan to eat (smile).
Disney has 3 great dining plans:
Quick Service Dining
Standard or Basic Dining
Deluxe Dining
Each one will save you money compared to paying out of pocket. Quick Service saves you 20%, Standard saves you 30%, and Deluxe will save you a good 40%. Quick Service is the least expensive, while Deluxe is the highest.
We are also a family of 4, and have done both the Standard Dining and Deluxe Dining. Deluxe is the "Taj Mahal" of food: 3 meals, 2 snacks per person per day. If you're a family that likes to sit down and eat, I'd choose this plan. The only downside is if they are all table service meals, you'll find yourself planning your days around when and where you eat vs. where you want to go.
Standard Dining gives each person 1 table service and 1 snack per day. For a family of 4 I'd at least get this option.
So the question is: Standard or Deluxe? If your family aren't big eaters, stick with Standard. If you like to enjoy 3 meals at a table or quick service with the family, go with Deluxe. One tip: Quick service meals are generally less expensive than table service. So if you spend the extra money for deluxe, go table service as much as you can. Also, table service has the character dinings. Something to consider for the kids.
Good luck on your Christmas vacation!