Good advice below. When you stay off site, you have to convince the kids that the shuttles (hotel shuttles and Disney trams) are part of the experience to be enjoyed. They need to look at scenery, people-watch, and learn how Disney moves a lot of people around. A lot of kids have hand-held electronics to help pass the time, but you have to get them off those too or the whole experience is looking at a tiny screen while waiting in line for this and that. Talking to neighbors in line about where they are from and what else they've seen at the parks is helpful.
Christmas is crowded - you already know that. Staying off site saves money but it means it's not convenience to go back to the hotel mid-day. It's completely acceptable to bring food into the parks and find a bench or a piece of grass to sit on while you eat. Do that. Hungry, cranky kids don't always want to stand in line to get into a restaurant or snack bar. You can always get an ice cream or a lemonade, but you need something nutritious too. I'd get one of those insulated packs and take some yogurt, string cheese, fruit, napkins and spoons. Do not buy plastic water bottles - expense and litter! Buy a stainless steel or BPA-free bottle for each person and refill as you go. That's also great for the airplane and getting through security. Airport prices are exorbitant. Every person wears a small backpack with comfortable straps. That's how we got through it.
I agree about the "unofficial" guides and websites. The families with little kids are up at the crack of dawn and getting early admission. They go to the very first attractions near the gate. One of the best tips we got was to drag the kids all the way to the back of the park first - fewer crowds. Go on those rides, then work your way toward the front. When you're dog-tired at the end of the day, you're near the exit. Check ahead on which rides/attractions you think you want, and verify that they are open - there's always one that's under construction/renovation/upgrade! Be sure to schedule in some attractions that are sit-down shows - great for tired feet!
Good sneakers and socks for everyone. No cute sandals or discount shoes. You'll hate yourself if you don't! Get some of those emergency rain ponchos at the Dollar Store or auto supply discount store - they are great for sudden rainstorms. Disney sells some but they are expensive - save your money for real souvenirs (which you should not allow anyone to buy until you are on the way home for the day - otherwise you carry things around all day). The kids will say the ponchos look dorky, but as soon as it rains, they'll see everyone in Disney World wearing them!
Put a bracelet on your kids or an ID tag in the backpack with your cell phone numbers on it. Instruct them to look for a Disney employee with a name tag. Establish a rule ahead of time that we go to a bathroom when we pass one, not when we think we have to pee. Don't wait!
Prepare kids for lines and waits and not going to everything. Prep for height restrictions on certain rides. Be willing to split up with one parent taking each kid to different things if they don't always agree on what they want to do or if one kid is too short or the older one doesn't want to go on a "baby" ride!
Take an extra cell phone charger. Get a fridge in the hotel room and, if you don't have a car, find out about ways to get to a grocery or convenience store for basic food items so you aren't totally dependent on restaurants. Some hotels have delivery service info in the room.
Plan for things to go wrong and have a back-up idea! Have a deck of cards or an UNO game or something else small that lets you do things as a family while waiting or resting those tired feet.
Have a great time!
