Ok, since we have made the trip to NF about 4-5 times in the last year (we only live about 1 hour from there) and our last trip was 2 weeks ago here are a few recommendations from me.
1) Definitely do the Maid of the Mist tour (well worth it - you will get wet).
2) If you want a more economical place to stay - look at the Hampton Inn
http://www.niagarafallshotels.com/hampton/index.php
You can get the packages with the water park (and if you have little kids the Hampton Inn also has a pool in the hotel for more quiet swimming).
The Hampton Innn is right across from Perkins restaurant and the old casino and a 5 minute walk to Clifton Hill.
3) We are not a "wax museum" family but if you are interested there are about 6-7 of them within a 10 minute walk of the hotel.
4) Food is VERY expensive in NF - even Denny's for a family of 4 will run you $70 for breakfast (no $4.99 Grand Slam in NF). TGIF's is reasonable for dinner and there is always Wendy's on Clifton Hill for you.
5) There is a "Hershey's" chocolate store attached to the Hard Rock Cafe (by the old casino) - some amazing chocolates for sale and the best part FREE SAMPLES!
6) Of course the Falls themselves are breathtaking and on Friday/Saturday night they "light them up" and this makes for some spectacular pictures.
7) For the adults the Casinos are very good and the new casino gets some pretty good entertainment (Reba Mcentyre, The Moody Blues, Brian Wilson, etc).
Have a great time!