I live near Orlando, and so WDW has always been there to do....I loved Fantasyland as a child and Epcot as 10 yr old (It's not as good now...JMO) and couldn't wait until I could take my kids...but wait I did. Don't go until your child is at least 3, better 4. I think between 4-9 they get the most bang out of Disney (Magic Kingdom). The slightly older set will like Epcot and MGM a bit more I think. Animal Kingdom has a little for everyone but it's not the most fun park.
My other big tips: Early December thru late February. Excellent in terms of lines and weather, which IME are everything. The infernal heat of summer in central FL coupled with the lines and the teeming throngs really drives parents to the brink of child abuse, I think.
: As long as you skip Christmas vacation, the winter is the time to go.
And, give the kids spending money if they're old enough, so they can decide if that $18 light up sword is worth it; or if they're little, buy them one small thing at the beginning and one small thing at the end. Yes there is a LOT of merchandise there, if you are prepared for it it's less annoying. Some of the stuff is unique and worth buying, but it can be overwhelming.
And finally, if your child is under 6, definitely stay somewhere close by (preferably connected to the Monorail, but that might not make the budget) and arrive at the park early, then go to the hotel for lunch/nap/unwind, and return for the evening, especially the Light Parade and the awesome fireworks. They really do have kick ass fireworks at the Magic Kingdom.
Overall...I think it's a great place to go and the kids will love you for it. My husband's parents never took him to DW when he was small, and I felt sorry for him when I found out :LOL