For a nice family orientated holiday you could look at camping/mobile home type holiday in France - you could even drive there if you didnt want to fly. Eurocamp and keycamp holidays spring to mind for this. VERY child friendly, but unless you go south, not always reliable re sunshine.
Otherwise most european resorts would probably be ok. I'm a big fan of portugal, but it does get very hot in summer, and as its on the Atlantic and not the Med, the sea is rather cold. Loads of friends with young children like Majorca, but I've not been there, sure other geeks could help.
I'm so excited for you! There's nothing better than planning a holiday
Go through all the brochures, decide where you like, then research on net, as you may get the same holiday loads cheaper. Once you have a few places on the shortlist, check out
www.tripadvisor.co.uk to read other travellers' feedback on both the resort and the specific hotel. (I tend to ignore feedback from usa travellers tho as they seem to set their standards rather higher than european resorts can match - no offense meant to US geeks
)
At the moment, it would seem that the earlier you book the better deal you get, although you can still get some late minute bargains. However, with a youngster in tow, I would recommend booking early to ensure you get the holiday you want.
Lastly, and this may not be too important for other people, but it is for me, check flight times (I wont travel in middle of night) and transfer times to resort from airport. You may not want a 2 - 3 hour transfer with your son after a 2-4 hour flight! Be wary of very short transfers tho, as it may mean you under a flight path!
Do any of your friends, family or acquaintances have a timeshare anywhere that they would be willing to rent to you. In my experience timeshare resorts are usually quite nice but you would then need to book flights, transfers etc independently and wont have the use of a rep.
Sorry for long ramble, but hope this helps a little. Good luck. xxxx