As luxury hotels are quite cheap in Malaysia why not check out one of these:
Both of these are in the center. Traders might be the best choice as it lies with beautiful views to KLCC Twin Towers which is just across the big park there. In the park there is a small water-park for kids.
Make sure you insist on using metered taxi's in KL, taxi drivers are the worst I have ever come across in terms of service and over-charging tourists. But otherwise people are quite friendly there. The hotel should be able to arrange transport for you from the airport though.
Another alternative is the Sunway Langoon which is a bit south in the city (where most foreigners and "upper class" lives). The hotel is part of a big shopping centre and a water/theme park. A taxi to the city centre is about 25RM (less than 10 USD) depending on traffic (which can be slooow)
http://kualalumpur.sunwayhotels.com/ over 9 years ago