My recommendation would be to spend the time after Nusa Dua in Ubud, Kintamani, Lovina, Candidasa, and then finish off in Kuta/Legian. You can use each of these places as a hub to visit outlying areas. Kintamani is a great 2-night visit so that you can climb the volcano at sunrise and have a breakfast of volcano-boiled eggs. Lovina will allow for visits to Banjar hot springs, Menjangan Island, sailing (or chasing) dolphins, and swimming with dolphins. The n orth coast allows access to the shipwrech snorkel right off the coast at Tulamben as well as a dip in the sacred Tirta Gangga spings. Candidasa is a great place to find hotels right on the water (but no real beach), Bali Aga villages, access to good rafting on the telaga Waja river, and small villages to explore. Ubud offers days-upon -days of cultural attractions, art galleries, the monkey forest, and shopping. We took our 2 small kids in July-August 07 and they loved it all. I have contacts for a great driver if you need a recommendation.
Best of luck.
Darren