L.C.
This is something I actually know about. I was a travel agent who specialized in Disney and Vegas. I graduated the "College of Disney knowledge" twice with perfect scores each time. On top of that I've been to Disneyland 13 times and Disneyworld once (am going back to Disneyworld in November).
3 is a great age for kids but 1 really isn't. I'd wait at least another year so both kids can enjoy. Disneyland is much much smaller than Disneyworld and is the best place to start if you have never been and also if you have small ones. It is alot less intimating than Disneyworld. Disneyworld would be better for them after they are both 5 years old.
Disneyland has 2 parks (Disneyland and California adventure). California adventure is ok for little ones but besides a few things like a playhouse disney show and muppet 3D there really isn't much there for them. If you are going to do just Disneyland I'd allow 2 days for the park and reccomend you stay on property (they have 3 hotels) since you'll have little ones, it is soooo much easier! If you are going to do both parks I'd get a 3 day pass.
Disneyworld has 4 parks (Magic Kingdom, Epcot, MGM/Disney studios and the Animal Kingdom). That is alot for a couple of real little ones and for a couple who haven't been at all. If you do decide to do that instead of Disneyland though get a 5 or 6 day park hopper pass. Park hopper means you can go to different parks in the same day instead of being stuck all day at one if you find it's not your thing. It cost just a couple dollars more and is worth it. Also, there it'd be good for you to stay on property also. The whole Disneyworld area is the size of Manhattan so that should tell you how big it is.
Both are definetly awesome though!! If you have any more questions I should be able to answer them for you so just message me. =)