I'm so jealous! I LOVE San Fran!!! I kept my bookmarks - they make me smile. Meeeeemories.....
Alcatraz - make sure to get your tickets online in advance - the tours sell out quickly and are usually not available by just walking up to the ticket booth. And spend the extra few bucks for the audio tour. It's well worth it.
http://www.alcatraz.us/
I didn't go to the aquarium, but did lots of shopping on the Wharf.
Haight-Ashbury is worth a visit - you can buy some flowers for your hair.
I stayed at the Triton (Strand's suggestion) and loved it. But it's not the best hotel for the little ones. No pool or anything like that, but it's in a good location, right at the entrance to Chinatown and a short walk to Union Square.
http://www.hoteltriton.com/
I agree about Sausalito! You can spend 1/2 day there and see most everything. The Record Plant is now called The Plant.
http://www.plantstudios.com/
Santa Barbara is charming. I haven't been there in years, so I don't know what to recommend anymore. I think State Street is where all the action is?
If you go to Hollywood, Universal Studios is worth visiting. And a visit to Graumann's Chinese Theater, during the day. Hollywood Blvd. is still kinda seedy and scary...
Have fun planning!!