We are planning a trip to New Zealand next Feb with a 2 yr old toddler from Chicago. This is our first trip to NZ. We plan to spend about 12-14 days in NZ.
Need recommendation on the following:
1. We prefer doing only 1 island which is recommended north or south?
2. We prefer driving, any recommendation on carrying our car seat or is it easy to get there from the rental company?
3. Any other recommendations on travelling with a toddler?

South! South! South!

I love them both, but I agree that the South Island would be the best bet for you and your family.

Lee Ann

The South Island has the 'badass' scenery which is such a good description but probably more driving involved.
Don't write off the North Island as in 2 weeks you could do some of Bay of Islands and then to Waitomo/Rotorua/Taupo.
Rental car companies will hire you a car seat. Is the little one just turned 2 or are they nearly 3? Under 2's need to be in a rear facing seat here as it is safer. I would rent one when you get here as you will have to bring a pushchair/stroller and other baby stuff. Do they travel well in a car?
Don't drive too far each day - roads here are pretty winding and narrow and make anybody car sick.
There is a lot to do in Queenstown and a trip to Walter Peak to see the sheep would be fun. Sometimes they like the simplest things rather than the tourist activities. We took our kids to Surfers Paradise and round all the theme parks and my (then 3 years old) son's most favourite thing was the pelicans on the beach as we do not have them in NZ.
February is really busy here so make some bookings soon.

Thank you all for the recommendation. My Lo will be just little over 2, so far he does okay in driving as long as it's not over 5-6 hrs. Any recommendation on must go places in south as I am putting an itinerary