Just back from a 2 week break with a 20 month old and had a lovely holiday but to make this easy i will bullet point:

Accomodation: had to be moved from 3 storeys to ground floor as had a baby with pushchair and no lift (?) - both apartments were excellent , spacious , very clean and well furnished.
Resort: pretty, could get round it in a day, lovely beach, nice restaurants and cafes, couple of small "corner shops" and local shop Baptista which for the price is like shopping at Harrods- 5 euros for a smll jar of marmite!
Staff: excellent , resort manager was very agreeable, professional and accomodating, all childcare was excellent.
Mark Warner Ocean Village: set up on 3 sites, with accomodation doted around the resort , which i believe is privately rented from owners. far too difficult to get between sites , up and down cobblestone hills and alleys, to get from accomodation/breakfast/kids clubs/tennis/beach/dinner etc....
Food: wasted money booking half board when it is for 5 of your 7 nights stay, only 3 choices of a la carte per evening with no REAL choice ( pasta/risotto or battered calamari anyone?), kids food carbs and stodge- no fresh fruit in the whole 2 weeks, no non sugar cereals etc.. AND you have to walk between sites to get kids dining for 5.30 then you after 7pm...easier to eat in the village of Praia la Luz we found.
Overall feeling was a bit dissapointed , have used Mark Warner before but this did not feel right, too much hard work to fit into there resort timings, personally would go self catering next time..........

Booked and stayed with Mark Warner.

Staff really helpful and friendly.
Nice pools.
Relatively quiet as early season (despite the Maddy McCann papparazi !).
Childcare looked good.
Apartment was nicely appointed and well equipped.
And the weather was superb.

However,
TERRIBLE food at the Millenium restuarant. School dinners. If this is included in your price, budget to eat elsewhere.

Luz is a nice base.
Restauarant O'Antonio best in town.
Worth hiring a car and exploring the west coast of the island. Amoria and Oxediaxa beaches both fantastic.

Will def be back to Portugal, and maybe even with MW if we want the childcare, just be prepared to eat out or cook for yourself.

We booked a late deal to Ocean Club and loved it! The apartment (King Palm) was huge and we seemed to have a larger apartment (more like a villa) just for the2 of us. The kitchen was fully equipt with fridge, freezer, washing machine, ovn, hob and plenty of crockery.
The bedrooms were large with plenty of storage. The balcony had lovely view of pool and sea.
We stayed bed and breakfast and found there to be a good choice of full english,pastries, fruit etc.
Praia du luz is a quiet resort but just what we wanted for a relaxing week away. There are a handful of restaurants within a 10 minute walk and the beach is beautiful.
Would highly recommend.
Only downside was long coach transfer which took about 2.5 hrs as lots of drops on the way and we were last to be dropped off.

Spent 4 weeks in the resort September/October 2007 after booking direct with the owner - yes you can book direct with the owners of the apartments as they are all privately owned. My apartment was well furnished with brand new furniture (I understand all the furniture has been replaced since November 2006). It also has a newly fitted kitchen complete with washer and microwave.

Being on the ground floor with a sea view and private garden was a wonderful benefit - no need to go around the pool area to sunbathe as the owner has 2 sunbeds which come with the property. My apartment was within 2 minutes of Baptista supermarket and across the road from the Tapas Bar.

Whilst I agree that Millenium restaurant prices can be expensive there are many superb restaurants in the village - one I would recommend is Ondaluz which is about 300 yards past the main reception - this restaurant has only been open 18 months but is fast gaining a reputation for excellent food and service.

I would recommend a car as there are so many places to visit and so many beaches within a 30 minute drive. Would I go back - you bet I would - I am hoping to go for a 6 week break this next January/February - again booking direct with the owner of the property (much cheaper than booking through Mark Warner, Thomas Cook or direct with Ocean Club).