Where to stay? Lots to do for kids. MUST do a day trip to Grand Canyon. Pool a must. Reasonable rates. I have only ever spent a couple of days in Arizona and really loved Sedona.
I know this is vague, but in preliminary planning stages!

It will be so hot (over 100 dep by then) here in June that all the major hotels will be offering discount rates. You'll probably end up on the "lots to do for kids" being in the pool 95% of the time given the temps that time of year. You didn't define "reasonable" but hotels that time of year will run anywhere from $49 to $140. Start with checking the Hilton's with have several lower-priced and resorts here.

You're right, this is vague. Too vague to get any constructive input, IMO. For what it's worth, I think you're putting the cart before the horse here: asking for accomodation recommendations without giving us the city, length of visit, and an idea of what your interested in doing will just get a lot of scattered responses that may not even come close to what you're looking for. Figure out a rough itinerary before looking for a hotel.

I'd suggest 3 things: 1) read some threads or guidebooks or something to get an idea of what there is to do, 2) think about what your interests are, and 3) either repost a new thread or add to this one by telling us how long you have, what you'd like to do (other than a daytrip to GC) and an idea of a tentative itinerary based on your time and/or interests.

It won't be as hot at higher elevations (Sedona, Flagstaff among others) as it will be in Phoenix or Tucson, so if the heat is an issue you should factor that into your thinking.

We would prefer to rent a cabin or a condo rather than stay in hotels - perhaps in a resort type environment - as they'll be 3 adults and 2 kids. Too much for one room, and hate to pay for that second room for the 3rd adult (my mom) As far as putting the cart before the horse, we're actually pretty flexible about the location, hence the accomodation recommendation request, as long as we're in day trip distance from the Grand Canyon. I really just want to expose the kids to something completely different to Pennsylvania and do the Grand Canyon at the same time. Deserts, red rock formations, perhaps some beginner level riding. Hihger elevations seem to make sense due to climate. We'd be staying for a week.

What age are your kids? Took family vacation in June '06 to Las Vegas/Flagstaff/Grand Canyon and had a great experience.

I say take a few hours and drive a section of route 66 (perfect if your kids are young enough to have just seen the movie Cars). Have a burger and shake at a roadside diner and buy postcards at the Route 66 museum.

It will be awfully hot, but we experienced sweet relief at South rim of GC on an overnight side trip.

Good luck.