Hi L.-
We've been twice in the last few years. We stayed at Pop Century when my daughter was 19 months and I was pregnant with my son. It was fine. The other ladies are right in saying that you don't spend much time in your room so it doesn't matter too much. I would say that the drawbacks to staying at a value resort are that it takes longer to get to the parks because they are farther away, when you leave the parks....the value resorts buses are parked the farthest from the park entrances (it feels like a long walk at the end of a long day) and that the food is just ok.
This last trip we stayed at Port Orleans Riverside, my daughter was 3 1/2 and my son was 20 months. We really enjoyed it. The rooms are in need of some sprucing up but the grounds are beautiful. It's a moderate level resort so it's still reasonably priced. It's fairly large so there are multiple bus stops within the resort. You can also take a boat to Downtown Disney from Port Orleans. We thought that the food court was really good. Nice variety of good food. We didn't eat in the sit-down restaurant but have heard good things about it.
When we were planning our last trip, I went on a lot of Disney forum websites asking for advice. Port Orleans was, by far, the most recommended moderate level resort. I think Pop Century was the most recommended value. There are definitely huge benefits to staying at a nicer, deluxe level resort, but we just couldn't justify spending the money. Someday we'd like to stay at a resort on the monorail.....probably the Polynesian.
Good luck in your planning! Feel free to send me a message if you have other questions! I love to talk about Disney!
Here are some other websites that are great for planning:
www.intercot.com (a forum website with lots of great info and you can post questions)
www.allears.net (has great info about dining and it includes menus and prices)
Have fun!