Lake Tahoe would be my vote.

A drive to Yosemite should be planned as an overnight.

I'm not sure you can do a day trip to Telluride from Aspen and especially Arches National Park. Aspen is great in the summer, the Maroon Bells park is beautiful but it is very, very busy.

Place name, why do you prefer Lake Tahoe? Please tell me your favorite things to do here.

All of the same activities are available in both Aspen and Lake Tahoe in summer - hiking, road (path) biking, mountain biking, and "manufactured" activities like ziplines and wall climbing. I don't know about rafting in Aspen, but rafting in Tahoe is pretty tame. Both are beautiful. Aspen the town is a better town for shopping and eating (there are many more outstanding restaurants in Aspen than there are around Lake Tahoe) and people watching than any of the towns in Tahoe --- in Tahoe, there are small towns dotting the lake, but the only really good town for walking and window-shopping is Truckee and it's not on the lake. Views in Aspen will be of the mountains, views in Tahoe will be of the mountains and the lake. If you're hearty, you can bike around Lake Tahoe (71 miles).

(P.S. We've been in Tahoe at least once every summer for 30+ years and have been in Aspen only in the winter).

Your best rafting experience would be near Moab or Green River.
Arches and Canyonlands beat anything that Aspen has to offer.
You didn't say where you are coming from or how many days you can devote to your trip.
My thought would be to fly to either Denver or SLC and rent a car to visit both Moab and SW Colorado including Glenwood Springs and Aspen.
If you have the time, ride the CA Zephyr (Amtrak) to Reno and rent a car to go to Tahoe and Yosemite.

We would have 7 full days, so I was thinking of driving to Arches Nat'l Park and then staying around there overnight( possibly in Moab, or maybe going to Telluride? - not sure at this point. What are the Canyonlands? How long should we allocate for Moab, keeping in mind that we have kids who do like to sightsee, but move through things quickly.

You can easily spend 2 or even 3 days between Arches, Moab and the Island in the Sky section of Canyonlands and not see everything. Canyonlands is SW of Moab.
Your kids would like the gondola ride up to the Glenwood Caverns in Glenwood Springs.
I have driven most of the way around Lake Tahoe but never felt the need to spend a night. Yosemite and Arches among my top 5 National Parks to visit.
The hike out to Delicate Arch is a must when visiting Arches.
I could also tell you how to find dinosaur footprints about 21 miles north of Moab.

It is hard to beat the Yellowstone/Tetons experience. The only place we have maybe enjoyed more is the Canadian Rockies--Banff/Lake Louise/Jasper. I have a couple trip reports from our visits there. It is a place I could visit every year. Spectacular scenery, great hikes for all abilities. One of the top N. American drives on the Icefields Parkway. I do think you do better moving locations here rather than renting for the week on VRBO. With 7 nts, I would recommend at least 2 nights in Jasper with the rest in Lake Louise or Banff.

We enjoyed Lake Tahoe--took our children and spent the whole 7 days there. It is fun to bike around the lake, jump off the boulders and into the freezing water at Sand Harbor, lots of hiking, can rent a boat---Ken Castle has a very good guidebook for Lake Tahoe.

We spent a week in the summer in Breckenridge. Nice hiking. Preferred Tahoe.

Estes and Rocky Mountain National Park are very nice with great hiking and everything else you are looking for.

We were very impressed this year with Telluride/Ouray. I wrote a trip report on this site. We never even did the #1 activity--jeep off roading but we enjoyed the town, the hikes, the views. At least in my opinion, this part of Colorado seems to have more spectacular mountain views and scenery than up by Aspen/Breckenridge/Estes. Accommodations were very affordable. We rented on VRBO. Your children would love riding the gondola everyday to town or to the Mountain Village. I never tired of the views--never needed to get in the car at night to go to dinner--you could take the gondola and walk everywhere.

Click on my name to find the trip reports. I am not quite sure how to link them here.

Funny you should also mention Banff/Lake Louise, as this area is definitely on our radar. My husband will be attending a conference - either the one in Lake Tahoe or the Aspen conference - that's why I am focusing on these two sights. Someday we'll explore Banff, just not on this trip! I will read your trip report on Telluride, however,as we would be interested in possible day trips or overnights from Aspen. Thanks for your response, LindainOhio and your helpful info, TomFuller!

BTW, will the music festival in July cause Aspen to be really crowded and detract from our experience?

North Tahoe has a woodsy moutain lodge vibe my fav

South Lake Tahoe pretty more commercial casinos etc

not too bad... boat rides mountain biking hiking

closest vibe to Jackson/Tetons between your 2.

395.com down to yosemite.com Ahwanee Lodge my fav there.

Aspen is pretty expensvie sort of a touristy yuppie

upscale feel to me prefer north Tahoe lots more natural pretty

I would choose Lake Tahoe too, pretty much for the same reasons qwovadis mentioned. North and west shores are my favorite areas of Lake Tahoe.

I also agree with quovadis' descriptions of Lake Tahoe.

Aspen is pretty tame in the summer especially for 3 kids. It is even tame for adults. In Colorado I would push Breckenridge for a wide range of activities and good white water rafting within a couple of hours provided you come in June. You have gold mines, ghost towns and good restaurants and lots of VRBO options. If you have strong legs you can bike from Breckenridge to Vail. My preference is the shuttle to the top of Vail pass and ride down hill from there. You have Glenwood Canyon and the Mineral Belt trail in Leadville which is really open air museum but nothing is fake. If the choice is Aspen or Tahoe, do Tahoe.

I've been to both Aspen and I've been going to Lake Tahoe yearly for a while, but I only have been in winter to either, for skiing. So it's hard to say but I'd agree with Tahoe as Aspen is just too expensive and I think there would be more to do around Lake Tahoe, especially if you include Yellowstone.

You might consider Durango, Colorado, I was there a week once in early September and there is a lot to do around there, and it is also very beautiful around there due to the mountains. YOu can easily do a day trip to Mesa Verde and the Four Corners area, also, or go to Silverton. I think you should consider that as a substitute for Aspen. I was staying in a dude ranch just outside Durango so was riding a lot but I had a car so did a lot of these other things, also.