We're WDW vets ourselves and are making our first DLR trip next summer. We've always done the value resorts at WDW, manly because when we're there and we're awake, we're out at the parks or in DTD. We're at the resort to sleep, eat breakfast and occasionally in the summer for a mid day dip in the pool, then nap, then back to the parks. I assume we'll do the same at DLR.
Like you, I really struggled with whether to splurge on the DLH or stay off-site. We're from the east coast so this could be the one time we do DLR, so I eyed staying on-site. For us, though, it just came too close to breaking the bank to consider DLH. Everyone's finances are different, so I don't judge anyone's decision to do what they want, but for us having the flexibility to help our kids have a good time was a priority. We'll be travelling as 5 adults. Two of those are our adult kids who are both enlisted in the military. They both do well managing their money, but I know things are tight for them, so I try to help where I can. If we stayed at the DLH, it would probably mean eating beenie weenies for the week.
For us staying at the Best Western across the street allows us to get one room to share (I know it may be a little tight, but we'll make it work). The free breakfast is a big deal and will save everyone a little. We're driving out, so parking is another consideration ($10 per night versus $100+). Toss in Hydroguy's WDW thread, his knowledge of both WDW and DLR and his thoughts on staying off site and I thought staying offsite made the most sense for us. This will allow me to pick up the tab for a couple of nice meals and really enjoy ourselves without worry.
Good luck with your decision.
