We are planning a cruise for 2006 with some relatives. There will be 4 adults and 4 children (ages 3-8).

This will be the first cruise for both families and neither of our families as ever been to any of the Florida parks but we visit DL usually once a year. We were thinking about one of the land/sea trips, but when we finally get to do WDW, I would rather be able to spend time and enjoy all the parks.

Anyone have any recommendations?

How exciting!!! Since it is your first cruise, land-sea is a good way to start. My choice would be the four day cruise + three days at WDW combo with an add on an extra day or two at the beginning (your travel agent should be able to accommodate that).
This way you can enjoy Disney World AND get the most out of the cruise (three days is just too short for this cruise line).

What will happen is when you check in to your hotel, you'll get your Key to the World card (this is an ID/charge card/key to your room & cabin). If you add extra days at the beginning, you will get a KTTW card that will only be for the duration of the "extra days" and then will need to go back to the front desk for your "WDW/CRUISE" KTTW (at least that's how it worked 5 years ago, they might have changed it so you no longer have to check in twice).