I'll add a couple points to the good info in this thread.

First, spend a couple days in Lisbon. I found it to be quite different than most European cities. Very cool and laid back in my opinion, and I really loved the unique neighborhoods.

Second, it's been mentioned, but I'd vote for at least a day in Sintra. Google it if you need more information, but if you or your family like castles and history, this has to be the greatest concentration of different castles anywhere, along with gorgeous views as you go up and down the mountains. IIRC, it was about a 5 Euro train ride from Lisbon, and a few more Euros for the hop on/off bus that takes you to several of the castles.