wow...a blast from the past.Here's how our trip worked - we spent about a week tent camping at the
Canyon campground. Family of 5 - a 12 year old, a 2 yr old, and a 3 month old //content.invisioncic.com/Mfootguy/emoticons/default_testemot.gif . We checked out a few other campgrounds, and this one is the best - tree cover, not just an RV parking lot, great amenities (i.e. showers/clean bathrooms), close to the general store, and centrally located.
food in the park isn't spectacular. There may be better dining options than what we found, but even the table-service places we tried were underwhelming.
It gets cold at night...literally freezing, even in July. That makes the mornings a little uncomfortable and a hot shower even more important.
As far as breakfast - what we found was the most pleasant was to pack up our food and portable camp-stove and drive around until we found a nice picnic spot and ate there. Maybe somewhere overlooking Hayden Valley or a beaver pond or something more scenic than the campground. In fact, I'd suggest trying to make as many meals as you can picnic style somewhere like that. Yellowstone is one of the most amazing places on earth due to the geothermals. Even without the geothermals, it has some of the most unique scenery and wildlife watching in North America, so to me, you want to maximize your time outside.
we loved the Grand Canyon, but the hike to the bottom and back up is a killer if you aren't used to the altitude and have to carry small children. If your kids are teens, this would be a good way for them to burn off some steam. Same with the climb up Mt Washburn.
Almost everything worth seeing is on the loop between Old Faithful, West Thumb, Fishing Bridge, Canyon Village, Norris, and Madison. Mammoth is not what it once was - its was drying up and not nearly as awesome as it was when I was a kid. Of course, that was in 2009 and Yellowstone has a way of changing, so YMMV. The Roosevelt lodge area is pretty meh.
Right by Madison is a little detour road called Firehole Canyon Drive. Highly recommend.
next time we go to Yellowstone, I'm renting a
supertelephoto lens for my camera for the week. If you are into fishing, they say Yellowstone has some of the best fly fishing in the area.
I don't know that I'd suggest staying outside the park. It's a long damn drive to get to the loop, especially given that traffic in the park seems to go at 35 mph., and I don't know how safe I would feel driving those roads at night - no lights, lots of wildlife, no cell signal kinda freaks me a little. West Yellowstone, as SB suggested, might be your best bet as it's closest to the loop. I know that it's at
least an hour from the southern or eastern entrance just to get to the loop.
Cody is a few hours away. When we left the park, we stayed there and it's a great little touristy western town. Nightly rodeo, a re-enactment of a shootout, a fantastic Buffalo Bill museum.
south of Cody is Thermopolis. It's been decades since I've been there, but I understand they have some great dinosaur digs you can see, plus natural hot springs.
of course, immediately south of Yellowstone is the Tetons and Jackson hole. probably the most spectacular mountain range in North America. I've never really found anything to do in the Tetons besides taking pictures of the mountains.
