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We have done it both ways. It really all depends on if you want to to all the work or have someone else do it. We found though that it's usually cheaper to do the flights on our own as we can choose from the different airlines and times to fly to get the best deal for us.
We've done both and found Ala Carte to be cheapest for our vacations. Our trips are usually 10 night stays. We found it cheaper to get one Annual Pass. With the room discount and the Disney Dining Card it ends being a cheaper vacation.
In the past we have always called and made a 'room only' reservation and then bought our tickets when we got there and put them on the room card.
Previously, calling was the only way to do it; the web site had only packages. They have now added that feature on the WDW internet site.
This time, for our 2007 trip, we just went ahead and booked a package, mainly because it was convenient, particularly concerning the Disney Dining Plan.
The main difference seems to be in when you have to make the full payment for the trip. The package requires payment in full before you get there. With our previous 'room only' reservation we just had a one night deposit and then settled the balance at checkout.
There's also a difference in the cancellation policy, with a 'room only' being able to cancel closer to the arrival date.
We always book it ourselves seperately. I think we save a lot by watching for good deals on flights,etc. We bought 10 day park hoppers with no expiration last Christmas, and use AAA to book our rooms. The only downside to that is that we don't get the dining plan that way, but it still works out cheaper for us.
A la carte has always been cheaper for us. I think you'll find that it is worth doing the math to find out, especially if you wanted to take a day off from the parks.
Someone else around here probably knows more about this than me, but I'm pretty sure that WDW tries to count everything as a "package" so that you do have a somewhat stricter payment and cancellation policy. For instance, we have always bought our room ahead of time and our tickets when we arrive, but they throw in free miniature golf for the family and call our "room-only" a "package".