Hi Viki
We went to the Creta Mare / Panorama (presently being run as one hotel) near Rethmynon, on Crete in October last year. This was 3 days before half term - we also have 2 adults / 2 children (then 4 & 8 ) in our party. We booked independently and it cost us £1415 (from Manchester)INCLUDING hiring a car for the week.
It is a 4* AI but the standards were more like 5 * !
It has excellent kids clubs (3 different ones depending on age) and about 5 different pools, crazy golf, tennis courts, football pitch, banana boats etc. There is good transport to nearby towns and the local fishing village. There is a wonderful replica Pirate ship that sails out of Rethmynon Old Harbour that does day trips. The food and drink and accommodation...not to mention the gardens & views , were all first class.
We use XL.com for the flights (type in the promotion code TESCO and this will get you an added £20 p.p. off) - you can fly to Chania or Heraklion they are about the same distance from the hotel. ...
and this site for the accommodation only ;
http://www.findmeaccom.com/scripts/TDBkgEngine.dll/Startup?utm_id=
If you don't fancy driving you can always book transfers / a taxi separately as well.
Hope this is of some help.
PS If you fancy going to Turkey again Eclipse are doing some good deals with free Child places for 2007.