My 9-year old is big into ancient Egypt, so she really wanted to stay at the Luxor. Given that it's one of the more affordable hotels on the strip, we stayed there for 3 nights last weekend. It was overall a good experience.
We lucked out and got a nice, standard room in the pyramid. The room was clean, the furniture was in good condition and the beds were comfortable. The room was large enough to be comfortable for our family of 4. Beware, though, that the beds seem to be doubles and not queens.
We went to the pool which was adequate though not particularly exciting. We ate at the Pyramid cafe, which was OK. The best part of our stay was the ancient Egyptian theme of the hotel, which the kids really enjoyed. I'd say the worst part was the location, too far from the hotels in the central part of the strip.
Full (and I do mean full) review at http://marga.voxpublica.org/2011/08/luxor-las-vegas-review/