Hi Melissa!
I would give our experience recently at Contemporary an A+! I went in December 2009 with my wife, daughter (who's 6) and son (who was 2 1/2).
The standard rooms in the Contemporary Resort are some of the largest standard rooms you'll find in any of the resorts! Having access to the buses, monorail, and even the boats gave us options, and made it easier to get around. For example, we took the bus to Downtown Disney, the monorail to places like Magic Kingdom, Epcot, and Grand Floridian, and the boat when we had a dinner reservation at the Wilderness Lodge.
They have nice stores, a good pool area, and a family favorite restaurant in Chef Mickey's (character meal starring Mickey and friends).
Their Quick Service, Contempo Cafe', is good. Plus, if you have the Dining Plan, it's one of the quick service restaurants that will let you convert a meal into 3 snacks. This came in handy when we needed to get a few things for our son (such as juice or milk) and had the extra meals to spare.
The Contemporary is literally right across the street from Magic Kingdom, you can actually walk there! Though, with small one's, it'd be easier taking the monorail.
But if you can fit in your budget, you must get the Tower Theme Park view. Being able to see Cinderella's Castle right in your own front yard made the stay extra special. We kept the curtains open at night, just to see the castle (and its ever changing colors) as we went to sleep. We also came early to the room one night, just to catch the Wishes Nighttime Spectacular right from our room, which was an experience in itself.
Have a magical time at your Disney vacation!