K.B.
I would pick up a copy of the Unofficial Guide to Walt Disney World - they come out with a new edition every year and it's been invaluable to us whenever we have gone for being able to plan things out so we spend more time enjoying rides and attractions and less time waiting in line. And know what to expect as far as how "kid friendly" an attraction is and what ages it is appropriate for (though every kid is different!).
When we went last year, we made sure we were there for when the park first opened - there will still be a lot of people there, but not nearly as many as there will be a few hours later. If you are there for when they open and hit the most popular rides first, the lines won't be that bad. Getting Fast Passes whenever you can will help tremendously too.
Take advantage of their Photo Pass service too. Photographers are staged around the parks and will take your picture then scan it on a card. Then you just hand the card to other photographers for more pictures. It's great for when you want all of you in the picture and you don't have to hand your camera off to someone else. Then you can get the pics put on a CD. It really came in handy when my husband had a photo op with the kids but I wasn't there and he found himself without a camera!
If the kids are getting tired in the middle of the afternoon, by all means, head back to the hotel and take a break. Let them swim in the pool, rest up, etc. They will be in better shape later in the evening to go back. Don't push them like crazy thinking you must do everything because they will just end up exhausted and overwhelmed. And if they want that $10 Mickey balloon or that $5 light-up thingy during the nighttime parade/show, by all means, get it for them. You don't have to go crazy but be prepared to spend something on little "extras" like that.
Of course it all depends on your kids ages and what they can handle, but park-by-park, these were our favorites (stepsons were 16 and 17, and DD was 3.5):
Magic Kingdom - Space Mountain, Splash Mountain, Big Thunder Railroad, Dumbo, It's A Small World, Mad Hatter Tea Cup ride, Buzz Lightyear's Space Ranger Spin, Prince Charming Carousel, Pirates of the Caribbean, Haunted Mansion. Also, we loved the Main Street Electric Parade at night, and their Wishes show and fireworks.
EPCOT - Soarin', Mission Space, Test Track, Living Seas with Nemo and Friends (including Turtle Talk with Crush). Illuminations show at night.
Animal Kingdom - Kiliminjaro Safaris, Kali River Rapids, Expedition Everest, Festival of the Lion King show, Finding Nemo stage show, plus the different jungle treks to see the animals.
Hollywood Studios - Star Wars, Beauty and the Beast stage show, Rockin' Roller Coaster, Twilight Zone Tower of Terror, Toy Story Toy Mania, Muppets 3D show, Voyage of the Little Mermaid show. Fantasmic show at night.
Your daughter might also get a kick out of a visit to the Bibbidi Bobbidi Boutique for a princess make-over...but it can also get expensive if you get the whole package. You can always bring a princess dress or costume from home so all they do is hair and a touch of make-up (and LOTS of glitter!). The barber shop in Magic Kingdom will do something that is less elaborate and less money, but still very cute. Your son might also get a kick out of being a Pirate For A Day (Magic Kingdom).
Unless you get Park Hopper passes, and can visit more than one park in a day, you might have to plan things around which parks have their evening shows going on. Depending on the schedule, not every park does an evening show every night. So if Hollywood Studios is only doing Fantasmic one night that you are there, that's the day you go there.