exactly the stereotypical attitude i was referring to in a nutshell, i'll assume from your post that you've been to malia,in which case you'll know all about the 'family end' of the newer town and of course the majority of old malia,both of which are ideal for all ages and backgrounds.Again as with other resorts the 'lairy' bars etc are mostly concentrated on one street.
As for Faliraki improving from the past,well it's not actually changed much at all to be honest,and never deserved the reputation it got itself in 2002,most of which was made up to sell papers and gain ratings for SMG-TV's 'clubreps' projects.
(i'm posting as a worker and resident of 9 years now)
What amazes me is how many muggings,stabbings,drug dealers,rapes,thefts,drunken fights,rip offs and scams there are in places like Magaluf,Benidorm,Tenerife and Ibiza every summer yet no one comes on here and warns people to stay away from 'those places'
To the original poster,i think it depends how active you want your holiday to be,if you genuinely want to just relax and escape hustle and bustle then a quieter island like kefalonia would be fine but if you want the choice of activities,sights,commercialism mixed with the traditional and a bit of 'british based' entertainment like you'd find in spain then i'd recommend a bigger island like Rhodes,Crete,Corfu etc