Itinerary 1:
3nts - Arenal
2 nts - Monteverde
4 nts - Montezuma
4 nts - Manuel Antonio
1 nt - San Jose
or
Itinerary 2:
3 nts - Arenal
3 nts - Montezuma
5 nts - beach hopping northward Nicoya Peninsula (suggestions? Mal Pais, Samara, Nosara and surrounding beaches - what are the roads like?)
Drive from Nosara to Monteverde (how long?)
2 nts Monteverde
1 nt San Jose

Kids are 8 and 6...any ideas welcome!

Not sure I'd spend so long in Montezuma, especially with young kids, but that's just my dos colones. There are other beaches that are calmer for swimming. The road northward - a lot will depend on time of year you are going. If you're going to do the drive to Monteverde, I'd go for at least 3 nights. Also, I'd stay in Alajuela (where the airport is) instead of San Jose. For a change of pace, Selva Verde is a great place & location, cheap and the bungalows have a/c with 2 beds so you could all fit into one. Just my opinions!

tully - Since you mention it, which swimmable beaches do you recommend for kids?

Exactly what I was thinking....best beaches for kids in Costa Rica would be a great new topic!
Thanks for the Alajuela tip.
Not really thinking of changing my trip - but wanted to know - should we go to Manuel Antonio or beach hop in Nicoya?

Manuel Antonio. Biesanz beach here is in a cove and beautiful as is the amin beach and the beaches in the park are even more incredible. At the moment its raining most days for a couple of hours so the roads in the Nicoya aren't going to be as reliable.Manuel Antonio has all the amenities and activities andbeaches and wildlife that you need for the whole family. The main beach place in Nicoya is Tamarindo but that doesn't have the lush green surroundings and no monkeys!! instead it has boutiques and mini malls. Personally i'm not a fan. Definately agree with tully about Montezuma. Not the best place for familys. Bit of backpacker party place. Plus sown this way we have incredible waterfalls to. Thats my dos colones ;-)

The calmest waters I found (personally) was the beach inside Manuel Antonio. Barely any waves - at least whenever I've been there. Can't say about the NW - never been there - but I've read that Samara's beach is very good for children.