We did it last year for our trip and loved it. We have two teenagers, a boy and a girl, and the sleeping arrangements in a regular hotel room were going to be difficult. Besides, having four (practically) adult people in a room just seemed like it would be very crowded. So we checked out condos and for the exact same price as a moderate, we got three bedrooms, full kitchen, and a washer/dryer.
It was heaven. Everybody had their own TV in their bedroom and our son had a Playstation. We could really REST on the afternoon breaks because we weren't tripping over each other. We could snack whenever and whatever we wanted. Driving into the parks everyday was a breeze--I had worried about being able to find our way around but the signage at Disney is great and we never were lost.
Our experience was so good that this year we moved up to a house so that we will have our own private pool and jaccuzzi! And still managing to keep the per night cost below $150 a night.
We have stayed on site before when the kids were smaller and that was fine too. But for larger groups, or older groups, the extra space far outweighed the "Disney Magic". As long as you have a car, I highly recommend it.