Looking for a lodging recommendation given that I will be travelling with a 2yr and 4 yr old. We plan to go back to the hotel/resort for nap time. A suite is preferable.

Budget is flexible. We don't need a kitchen.

We will be spending most of the time in the Magic Kingdom.

There are various hotels in that area that would fit your needs.
There are a couple of Embassy Suites, along with Homewood Suites and Residence Inns.
Great idea to have nap time. We did when visiting Disney, when our children were little, and it made for a nice trip.
Have a great time!

The most convenient WDW hotels for access to the Magic Kingdom are the Polynesian, the Contemporary, and the Grand Floridian. They are all stops of the Monorail. I don't know if any of those have suites though.

If budget isn't a big concern, you could also look into a deluxe room at the Wilderness Lodge. I think those rooms have a separate bedroom. You can take a ferry to the Magic Kingdom from the Wilderness Lodge, as well.

I would suggest Disney's Pop Century Resort -- it's part of their "value" resorts, and they are the most kid-friendly and kid-loved resorts on property.

Check out http://www.disneyworld.com/ for more info (and to read up on the other Disney resorts).

Staying on Disney property is probably your best bet, as it's super-easy to get to and from your room during the day (10 minute bus ride).

Have fun!!

You could do two connecting rooms at Pop Century, otherwise I don't think that's what you are looking for. Resort is cute, but rooms are small. Certainly, nothing like a suite. However, with two connecting rooms your little ones could nap in one room, while you are in the other.

All Star Music Resort has "Family Suites" now. Transpo to and from Magic Kingdom is good, but once you get to the resort there is quite a walk to some of the rooms so you might want to get the deluxe (closer) room.

I might suggest you think about the Polynesian. While not suites (though they do have them) the standard rooms are fairly large. They have a day bed which converts into an extra bed (which our kids sleep on) and the room has more than enough space for two adults and two children.

I think if you're intent is to go back and forth to the Magic Kingdom the Polynesian location is ideal. It's the third stop on the monorail or the second stop on the boat. You leave the park and be back in your room in under 30 minutes.

We'll often head to the park in the morning when it opens, take a mid-afternoon swim break, then head back to the park around 7 when things begin to clear out a bit. Lines are atrocious beginning around 11 and can be that way until the early evening.

If as you said budget is flexible, it might be worth considering their Club Level Rooms. They are about $70 per day more expensive than comparable rooms but we find them to be well worth the extra cost. They serve breakfast daily which includes cereal, muffins, etc. During the day there are drinks and snacks available. From 5 until 7 they offer a light dinner. On more than one night of our July trip, we just had dinner there as they'll serve things like sushi, noodles, roast chicken, etc. (They always have PBJ for the kids.) It isn't for everyone. But, we find the extra cost worth it just to make it easy to get up and out every morning.

If the budget for that is a bit more than you want to spend, Disney has numerous other hotel options at all price ranges.

For flexibility, we also prefer to rent a car. The bus system is extensive but we'd much prefer to drive the 10 or 15 minutes between the parks than have the bus get us there in 45 minutes to an hour.

When our children were young we would get a trailer at Fort Wilderness--now called cabins. I did like having the kitchen because it was a chance for a quiet meal and the children weren't expected to be on their best behavior. We'd get a 2 bedroom, kitchen, LR & bathroom model.
If I remember correctly we could take a boat to the Magic Kingdom.

Also see

http://www.vacationrealty.com/

I second the Polynesian. I've stayed on and off Disney property and our stay at the Poly was the best. The convenience to the Magic Kingdom is great, the kids loved the pool - a lot of fun.

I have stayed at the Poly at least 5 times with my 3 kids started when they were 6 & 4. It is convenient to the MK. My kids still love the pools. The Poly has a gorgeous view of the MK, and the fireworks at night. I stayed at the Concierge blding once, I thought it was a total waste of money. Pay for a pool-view room instead. This will get you near the pool and the main blding and monorail.
We always get 2 connecting rooms. The Grand FLoridian is equally convenient, and very nice.

Not sure what "flexible" budget means but if the cost is not a big issue I would suggest you also look at the vacation club units, all of which are on Disney property.
Our favorite is Olk Key West which is the first of the vacation club resorts.
You can get a studio (about the same as a hotel room) or a one BR unit which will have a sep. BR, LR and small kitchen.

Most (except value class) disney resorts get you into the park an hour early. You might get two rooms at the contemporary for the price of one at Grand Floridian. I'd stay on the monorail line for quick and easy access.

Jackle: All of the Disney-operated resorts -- including the "Value" resorts -- participate in the "Extra Magic Hour" programs.

It's evolved over the last few years, and now the program involves one theme park opening an hour early and/or another theme park staying open up to 3 hours later.

Check the Disney site for details about which parks are open early/late for resort guests.

Thanks for the update! That's good to know. The kids just looked at disney pix from when they were "little" and they are interested in going back again.

We stayed at the Contemporary when our kids were younger because of its close proximity to the MK, the monorail stop within the hotel, and Chef Mickey character breakfast is also inside the hotel. The Contemporary was also the cheapest at that time because it was the oldest (thus the prime close proximity to MK), but I've heard they've since renovated the hotel so I don't know how it compares price wise to the other hotels. It was VERY convenient having to go back to the hotel for mid day naps and back to MK for nighttime parade and fireworks. I'm not sure if you've ever been to DW before, but it is a sprawling area and just getting from the parking to the theme park or switching parks is very time consuming especially when you have little ones. The place is huge!