I should warn you that August is seriously rather hot... it was 54 degrees one day (thats a hot face rather than grr)
July and September would be cooler, though I assume you need school holiday time.
We did 2 weeks- the first week was a Nile cruise- Temples at Dendara, Abydos, Luxor, Edfu, Kom Ombo, and Philae (at Aswan) Abu Simbel was an optional day excursion (involved flying, so we didn't bother), followed by a week in Luxor at a 5* hotel- this one, though it was a Le Meridien when we stayed there 6 years ago. (if you look at internet reviews, you'll see how good it is... fantastic hotel)
with visits to Valley of the kings, a stele (obeleisks) quarry, and hot air balloon ride (over valley of the kings at dawn... utterly amazing). We basically OD'd on history and culture the first week, and chillaxed the second, mainly in the pool.
Not sure how much your youngest would get out of it, but pretty sure your older 2 would absolutely love it.
Kuoni were fabulous- everything was taken care of and we (our group, not us personally) had an Egyptian archaeologist with us the whole 2 weeks, to take us round all the sites, and he really was knowledgable.
Of course, there is the other side of Egypt- diving in red sea... probably pretty good too- MW have a couple of places, usually with plenty of last minute availability in summer, and of course all the usual sports stuff. Egypt is too hot really to lie and fry tan- you need to be in the water (or indoors... with the most amazing air con- I got a lot of reading done that holiday) to deal with the heat.