Having small children doesn't mean you cannot travel, and doesn't bind you to theme parks, fast food and TV watching in the hotel room.
In seven years of my oldest daughter life, we moved 4 times and have been several times to Boston and further north; New York and Catskills; Cape Cod; Washington, DC; Florida; Upper Peninsula and Lakeshores of Michigan; the Southwest (New Mexico, Colorado, Utah, Arizona); San Francisco and Los Angeles. Israel and Russia -- two times. We never went to any special kid's attractions we abhor and kids never complained. They were happy with the things and foods we like.
Once you know your available dates, decide on means of transportation. We did most of our traveling in our family car. When we traveled by air, we used frequent flier miles as much as possible. Travel guides help planning (Lonely Planet is the best, Frommer's is good enough for low-key family ventures), as well as friends' suggestions. Plan more than you will have time for. Often things are different in reality, and it may turn out you don't like some major attraction or cannot get there. Have a plan to fall back onto.
Transportation: airplane tickets are expensive, but there are ways to cut the cost. Planning the vacation after the business trip to a good place and points from airlines are obvious. Tickets are usually cheaper if you stay over Saturday night; if you fly red-eye or leave at an ungodly hour in the morning; if you fly with a connection. In terms of inconvenience, I found that red-eye flights with children are no problem -- it saves day time for vacation, and kids will rather sleep at night; transfers are plain hell.
Children don't have to be or make you miserable during the flight. Babies older than 3 month nurse happily, toddlers can be as exhausting on a plane as elsewhere, and for the older children adventure starts with the monorail in the airport.
Within 800 miles distance we traveled by car. It's the distance from Ann Arbor to Boston, or from Los Angeles to Albuquerque (we didn't try that last). With two drivers, it is one long drive. Contrary to the popular belief, children don't get annoying, restless or bored in the car. They listen to books on tapes (choose ones you like), eat dried fruit, look in the windows and sleep. We never left early: kids had a chance to run around and exhaust themselves before drive and parents had as much sleep as they wanted. We stopped only to refuel and had our food prepared and prepacked at home. During our long meandering drive from Albuquerque to Grand Canyon and back we had food I bought in Trader Joe's and Whole Foods Market in Albuquerque: bread and flatbread, cheeses, meat cuts, canned fish, avocados, yogurt, and dried fruit.
Where to stay: My youngest son slept in the tent in the back-country campground at 2.5 years, and I know people who camped with babies. Large portion of National Parks have campgrounds. Chain motels (Hampton, Holyday Inn and such) off the highway in the middle of nowhere are as clean and comfortable as an interesting and expensive first-rate hotel in te downtown. And, if you are planing to stay with friends, one room is sufficient for a family of five.
See also: children, Southwest kids.