This information was provided by HeatherO on the discussion board who travelled with her 1.5 year old in May, 2006.
This was my personal experience, and as with all things "parenting" you have to figure out what works for you -- so take my free advice for what's it's worth!
We stayed on the Beach side in the first building. Although I would have liked to have been a bit closer or centrally located, it wasn't too bad, it was quiet, and we enjoyed the walks.
Transportation -- we weren't on a package deal, so we booked private transfer through Cancun Valet (we also rented a cell phone from them, which was great). While expensive, it was worth it to have the private trip and the non-stop transfer that gets you there as fast as possible, instead of stopping at multiple resorts. After a long plane flight, he didn't want to sit still any longer than he had to. Bring a car seat if you want your child to use one for the transfer. We didn't, and just buckled him in with a regular seat belt. While that worked OK, a car seat would obviously be safer. Your call.
We debated about bringing our large stroller vs. the umbrella, and opted for the large one. We're VERY glad we did, although it seemed like most others just went with the umbrella one. The big one provided more storage area for beach stuff, it was a smoother ride, more shade, it had a little tray for us to give him food, it reclined for naps (which he often took in his stroller), had a place for us to put our drinks, and was more comfy. It was somewhat of a pain taking it on the beach, but not much of one.
At the buffet, sit at a table closer to the wait stations. The staff is more likely to notice your needs, clear your plates, get high chairs, play with your child, etc. in a bit more of a timely fashion. It's also more convenient to sit closer to the buffet since one of you will likely be staying with the baby while the other gets food, and vice versa. Bring toys/books to the buffet so your child stays occupied while you finish your meal. And don't forget the wipes! We almost always kept our child in his stroller during meal time, and put food on his little tray on the stroller or feed him directly. We found it was a lot more convenient that trying to get a high chair every time and contain the mess (they are there, but not terribly convenient if it's busy).
Food: What's nice is they have lots of variety, so you can almost always find something they will eat, even if it's just hot dogs and pasta the whole time. Much better than ordering a whole meal and having it go to waste! The pasta station was great -- just some basic noodles with butter and parmesan cheese. Yogurts were a hit, so was the fruit. There's always some type of bread. And the ice cream cones are perfect for little hands. Wasn't terribly impressed with the "kids" section of the meals -- not much variety and usually wasn't very different from options at the main buffet. You'll also want to bring some familiar snacks for those "in-between times" -- crackers, teddy grahams, raisins, etc. -- whatever your child will always eat. If your baby takes baby food, bring what you'll need -- not many options for pureeing, etc. There are microwaves in the buffet, but I don't think you have access outside of regular hours.
Milk: It doesn't taste the same, and our son didn't like it. And he HAS to have his milk
We brought quite a bit of milk down with us in 4 sealed 8 ounce bottles (we just brought a little collapsible lunch pack with a freezer pack.) Although I think we would have had to toss it out if our bags were searched at Customs (the signs showed no milk products), it was worth the risk. Although it wasn't enough to last the whole time, we found that combining it with the milk they provide (get a blue box from one of the bars or the coffee stands -- don't get the stuff in the fountain at the buffets) we made it stretch and he didn't notice the taste as much. Probably different for each baby, but that was our experience. You may also want to bring formula just in case. Bring several sippy cups/bottles (we really like the take and toss plastic ones -- easy to pack and all one convenient stackable size). Bring dish soap to wash them mid-trip. There are orange juice kid-size boxes with sippy straws in your mini-bar -- write a note asking for more and they'll stock you up.
Toys: Bring sand toys, or buy them there for a much higher cost. We also brought one of those floating toys that allows him to sit in this little inflated tube -- he LOVED that -- both in the ocean and the pools. We found a portable DVD player to be a lifesaver -- it was great on the plane (we have a child that's addicted to Elmo and Baby Einstein), and then also for moments when he just needed some downtime in the room, especially in the evening. We tried to hook it up to the TV, but couldn't make it work -- but propping him up on the bed and having him watch the little screen worked OK. If you bring movies for yourself, it also gives you entertainment options once the little one goes to bed since you can't really leave the room. The outlets are recessed in the old side, so you might need an adapter to plug it in for recharging (ask for one at the front desk, and again, you may have to remind them).
Pools: The waterpark was great (on the new side, but not that hard to get to even from the far end of the old side, at least in a stroller). Our toddler was a bit too young for it, but he still liked splashing and some of the small slides. Older kids would love it. On the Beach/Caribe side there is a small wading pool for kids, but it's not zero depth entry -- it was about mid-tummy high on our almost 3 foot son. He didn't like the fact that if he fell his face went underwater, so we didn't spend much time in those pools.
Cribs/Beds: The crib they provide is a wooden crib, smaller and not quite as sturdy as your typical crib (maybe 2/3 the size?), but still safe. Ask for it at reception, although you may have to remind them (we did). Bring a sheet and blankets (or two or three!) -- they don't really provide either (at least not ones that fit well). We found it worked best to put the crib in the corner by the sliding glass doors, and drape the privacy blackout curtains around the crib so it was like a little tent. It muffled some of the noise during naps/nightime, made it easier for him to fall asleep with us in the room, and also gave us a little more privacy after he went to bed. [It appears that wooden cribs are provided at Caribe/Beach and pack n play playpens are provided at Tropical/Colonial]
Room: We found a ground floor room to be very convenient. Much easier for the stroller access, and it was also nice to have a little play area right outside your room in the grass. We sent an email request a week before, but I'm not sure if it we got that room because of the request or just because it was available. Worth asking for.
Clothing/Laundry -- Bring more outfits than you think you'll need. They get dirty quickly. And bring some liquid laundry soap so you can wash in the sink. We didn't do this, and regretted it as we had to wash a few of his things with dish soap.
Sunscreen -- get the potent 50+ stuff, and reapply it often (we usually did 3 times a day -- after about every 1.5 to 2 hours). Many people had kids in these bodysuit sort of things, and we wished we had brought more swimsuit coverage so we didn't have to worry about the sun. Our son didn't wear a hat or sunglasses, but both would have been nice if he did! Water shoes, if they will wear them, are also handy. We were able to find shade pretty much everywhere we went -- either by the pool or on the beach. It wasn't always in the most convenient spot, and he didn't exactly always stay in the shady spot, but we could always find it. There aren't as many options on the new side. The beach is also better/less rocky/more shallow on the old side, in my opinion.
If you want an extra little activity, our son loved taking bread and feeding the fish off the pier. He was also a big fan of non-alcoholic banana coladas.
There's also playgrounds at the kids clubs that you can use -- some slides, swings, climbing toys.
Well, I think that's it! Although there weren't a ton of kids there, I would still call it a very family friendly resort. It's certainly not the same relaxing, romantic vacation you might have if you were on your own, but we all had a BLAST. It's so rewarding to see your kids just tickled pink by playing in the ocean, sand and pools. Very cool. Wish we were back!!