The most "popular" one would be Beaches in Turks & Caicos. It is a great location, great beach, and fantastic childrens programs/activities. This is a "luxury" property for the Beaches group. T & C is a great island with great snorkelling, easy driving (flat not hilly). If you REALLY want to splurge with the kids, I would recommend Biras Creek or Peter Island in the BVI's. This is all - inclusive with your food but NOT drinks. Also, Peter Island has a minimum age and I believe Biras might also. If you do one of these two, your kids would need to be older. Also, with Peter Island, you could possibly a villa there. (VERY EXPENSIVE.) Another fun idea would be Bitter End Yacht Club in the BVI's. This is kid-friendly especially during certain times of the year (summer months.) The activites are endless mostly emphasizing the water (sailing, boating, etc.) You can get a meal plan here...not sure about the drink issue but I don't think it is included.
So, in summary, Beaches if you are looking for a total all-inclusive property with children of any age and the BVI's if you don't mind buying your own drinks.
Hi dldlaw, the Iberostar Paraiso Lindo gets excellent reviews as an upscalefamily resort in the Riviera Maya area of Mexico. It's south of Cancun, not as far south as Playa del Carmen. From that area you can easily do day trips to see the ruins in Tulum, go on snorkel adventures, and many other activities. Mexico is also usually priced lower than comparable Caribbean Islands for similar properties.