The Luxor has a section above the casino floor that has 3-D movies and a large arcade; there are walkways to Mandalay Bay (kids would absolutely love Shark Reef) and the Excalibur (I think the atmosphere at the Luxor is a little better than Excalibur). The rates at the Luxor are often advertised as ~$79, and the rooms are spacious.
I stayed at Circus Circus once when a funeral required I be there when rooms were booked everywhere else--never ever again, and no way would I bring kids there (except maybe for a few hours for the entertainment).