We have been to Thailand three times in the last four years. Going again in Sep/Oct this year.
In Chiang Mai, we have stayed at a couple of smaller run family hotels/homestays. The Castle is run by a Thai family and the proprietor, Pearl, speaks fluent English. They include breakfast and will cook lunch and/or dinner for great prices. We also stayed at a place a bit further out at Hang Dong, called Little Village. This place is run by a Dutch guy and his Thai wife. We loved it out there. Hans is also a tour operator and can organise trips for you. His specialty is bicycle tours but he just lent us bikes and we took off for the day.
If you do go to Chiang Mai, try and get an elephant tour. We went out all day, rode an elephant, bullock cart, water raft. They elephants also paint and play soccer. Don't buy the photo frames, as they are made from elephant cough and you can't get them back into Oz. Total cost for the day was less than $250 for three of us
In BKK, we book a serviced apartment through airbnb.com for peanuts. These are great because they have cooking and washing facilities, so you don't have to take mountains of luggage with you. It also allows you to maintain some routine with the kids and cook sometimes, so you are not always eating out. Stay close to the BTS or MRT. We stay at Lad Phrao, with a Big c supermarket 5 minutes walk one way and the MRT 5 minutes the other.
Terminal 21 or MBK for shopping is as good as you can get. Plenty of side street markets, food stalls and local culture. Try and learn how to get around on local transport as it is cheap. We usually take metered cabs (get out if they don't put the meter on) over tuk tuks because the cabs are usually cheaper and AIR CONDITIONED.
This trip, we are staying in a small village about an hour from the Cambodian border. Renting a 6 bedroom house for a week for about $100 - cheap as! Let you know how that goes when we get back!
