Hey Kristin! By no means are you crazy. I've been taking all three of my girls since they were 6 months old and there is going to be a lot more for the whole family to do than you can imagine. Of course, probably your park of choice will be the MK but there will be things at each and every theme park your little ones will enjoy, not to mention the fun you and dad will have watching them take it all in!
As far as were to stay, that truly depends upon your trip budget. All WDW resorts are fantastic, but with the ages of you little ones, my first recommendation would be any of the resorts along the Monorail line. This just makes it easier to get back for naps or even short breaks, if needed. After that any and all are fantastic. I would recommend you go to
www.disneyworld.com and take a look at all of the resorts. See which ones fit your budget and then which ones look like your family might enjoy the most. If you have more questions, then I truly hope you will come back to the Mom's Panel so that we can help you with all of your planning.
Thanks so much for the great question, and best of luck planning that 2010 vacation!