|Subject: Re: San Luis Obispo, CA vicinity|
Having been up and down the California coast with kids many times, I'd definitely go for Santa Barbara. The train lets you off downtown, and you can spend all day exploring the immediate area on foot. Lots of great restaurants, a toy store that will occupy your kids for hours (one of the best toy stores I've ever seen), and top notch coffee. Nice beaches, and you should be able to find a top hotel for $200/night.
Decent hotels go for quite a bit less (and may have considerably more charm than the most expensive lodging.)
JoAnne (Californian from Kansas City)