I think Val d'isere maybe does have a bit more character, though neither are especially pretty Alpine village types.
You get more stuff going on in Val. They had a street festival one evening when I was there last season. Closed the main street off and had entertainers, ice carving, etc.
More restaurants, patisseries, clothes shops. Nice pool, gym.
Both places do things like husky sledge rides. Val has an Evolution 2 place which organise loads of non skiing type activities.
Val is more expensive than Les Arcs, for stuff like food, etc. They were selling bottles of Brandy for something like £900 in the Spa in Val, and live lobsters!
There's a nice and fairly cheap place in Val near the bottom of the main lifts. Think its called the Sunset bar. You won't miss it, its massive. You can get lunch and a drink for 15 euros or cheaper. DH just used to have frites for 5 euros and they were fine about it. Nice salads for 11 euros.
If you can afford it then definitely val d'isere - it's a proper town with lots of shops and amenities, whereas les arcs is purpose built for skiers and there is less to do if you are not on the slopes all day. Enjoy!!
I was in Val d'Isere earlier in the year, there are lots of good activities for grandparents and kids - the Aquacentre is especially good. Here is a good article on more opportunities - http://www.lechardonvaldisere.com/LeChardonBlog/index.php/luxury-skiing-holiday-activities-non-skiers/
My parents are kindly coming on our next skiing holiday with us to help look after the DDs (will be 3.9 and 12 months). The best accommodation options for our group are in Val d'Isere or Les Arcs 1800. I reckon the former probably offers more in the way of daytime activities for non-skiers but then I've never been to Les Arcs - am I missing a trick?