You will need passports for the trip to Prickly Pear (you have to present them before you board the boat) so that may not be an option for you. Since you children don't have passports you are pretty much limited to staying on the island. There's plenty to do and see however so you won't miss travelling "off-island".

For snorkeling go to Pinel Island. It's a short trip by water taxi (they shuttle back and forth all day long and are inexpensive). As for equipment, snorkelling is not that great, or prevallent on the island so if you are planning on renting equipment consider doing only on the days you actually plan to snorkel.

The 12 meter yacht racing is lots of fun and well worth the price. If you can afford it then do it. You won't regret it and will create lots of good memories.

There are plenty of places where you can dine inexpensively. Try the any of the lolos, you'll be pleasantly surprised. For your romantic dinner try one of the restaurants in Grand Case 9there are plenty to choose from).

Bring plenty of sunblock. You'll find umbrella & chair rentals on some but not all beaches. If you are concerned (which it looks like you are) you'd be better off renting for the week so you can be assured you have them no matter which beach you visit.

Prices for water sports are pretty well set. I doubt you can haggle for a lower price.

I think A Traveller just said it all! LOL
I can recommend a couple of restaurants right near Pelican Key though.
One is Lee's Roadside Grill. the best fresh fish as well as ribs and chicken..all on the grill. very inexpensive. music every night.
down the road a little bit is Pineapple Pete's with a varied menu..very good food and moderatly priced. fun place. music most nights.
Peg Leg PUb... good food..moderately priced. also music some nights
If you want to bring food in one night, travel down the main road to the Food Express Market and the Lido restaurant right next door. In front of the restaurant is a take out grill place. excellent ribs and chicken dinners for $6.00 each....
there is a great bar at the Atrium Hotel called Bucanneer Beach bar. they have good food.. nice for lunch.. music some nights too.

check with the activities desk at any hotel and ask about trips to Prickley Pear..Maybe they can tell you if it's possible to take the kids without passports.
there are water sports all over the island.
a great one is the Rhino Riders. the kids would love this.
here is a web site with a lot of activities listed.
http://www.saint-martin-activities.com/qwerty/index.htm?c86.htm&1

deefinitely do the 12 metre boats if you can.. absolutely fabulous!
If you get a night out, consider eating at the Tropicana restaurant in the Port Royale Marina in Marigot. it's french
and expensive but a lovely setting and wonderful food.
the restaurants in Grand Case are excellent too.
Enjoy!

We just returned from a week on the Dutch side of St. Maarten. I agree on Pinel Island. We snorkeled there and it was decent. Most of the beaches we went to had chairs and umbrellas for rent. They ran about 15 to 20 dollars for the day. We were a family of 6 and we just rented 2 chairs and one umbrella and switched out all day. It worked great. Take plenty of sunblock and maybe get a shirt by Exefficio or another company that has spf built into it. I have to wear one even with sunscreen and a wide brimmed tightly woven hat.

Definitely go to Grand Case for a dinner out. Go to Lee's Roadside Grill for fresh fish for lunch or dinner.

We went to Anguilla for a day but you have to have passports for that too. I would ask when you get there about other forms of id like birth certificates etc. Maybe you can go with those! Orient Bay beach has all of the sea do's, ocean trampolines and parasailing, etc. The water is quite rough but it is beautiful!

Any more questions, just ask! Have a wonderful time. Oh, and you must take the kids to Sunset Beach Bar to watch the big planes take off and land! It is amazing. Bamboo Bernies is right behind it and it has great Sushi and other food too. Good Luck!

Anyone know much about Divi Little Bay Beach resort???

Divi Little Bay Beach Resort is located in the Philipsburg area. The resort is very nice and very convenient to the stores and restaurants in Philipsburg.
I believe, from what I have heard, that many of the rooms need remodeling.
it is an older resort.
I haven't been in the rooms for a long while, but the grounds are very nice.
There is a small beach there which has some half way decent snorkeling

Wow, thanks for all the great advice! I have a few more things I wanted to check on:

There are a few discount websites offering coupons to many of the activities on St. Maarten. Has anyone used these? The discounts aren't too big but for 5 people, they start to look worthwhile.

Are there certain days when cruise ships come in? Is there anything we should avoid doing on those days due to crowds?

I've read that many establishments don't want to take credit cards for amounts smaller than $25. I'm assuming travellers checks are universally welcome?

The phone in our condo will only allow calls to the Dutch side of the island. I'm debating if renting a cell phone to use is worthwhile. Does anyone have any info on this or a company they would recommend?

Thanks again to everyone for the great advice!!

We did not take travelers checks so I am not sure about it. Cruise ships come in on Tues-Thurs. We used www.queenofsxm.com for cell phones. It was $30 a week and you get your number before you leave home (to give to those at home) You also get minutes included in that rate and incoming calls only cost the person calling you! It worked well for us. You can pick your phone up on the way from the airport, or they will deliver to you for $5. We did use coupons off of Jeff Bergers website...like bottle of wine with dinner...free appetizers etc. http://www.jmbcommunications.com/sxm.html is the website. Good Luck!

Travelers checks are welcome everywhere.
here is the July cruise ship schedule
http://www.portofstmaarten.com/schedule.htm

the cell phone company recommended in the post above is your best bet on the island.
as far as I understand, the discount coupons do work.
enjoy your trip!