Thanks a lot for the help. Another member contacted me and mentioned the Zoo which I didn't even think about and I'm glad to hear the MAX runs to so many places. I'm guessing its safe enough for a family to ride the MAX during the day with luggage in tow?
Safe? Yes, it should be, folks do it all the time to get to the airport. But it's not real convenient, especially at peak times. So use the suggestion of checking your luggage at Union Station.
As others have mentioned, you picked an excellent city to visit without a car. Portland Zoo (with it's 30 inch guage railroad) is but a short Max ride away. Next to the zoo is the Portland Children's Museum, which is apparently quite nice, though I've never actually been inside. The Rose garden and lovely Washington Park isn't accessible directly by Max, but I'm sure there's a shuttle from the zoo and/or bus service. During the summer season, you can ride the zoo train to the rose garden. There's also a world famous Japanese garden right next to the rose garden. It's incredibly lovely, and well worth a visit, though depending on the age of your children it and the rose garden may not be overly exciting for them.
The Oregon Museum of Science and Industry is just across the river, and should be another easy bus ride. From what I can tell, it's like the Science Center in Seattle. Soon you'll be able to get there by trolley, and be able to walk across the street and visit 4449 and 700 in their new digs.
The suggestion of staying a night is a great one, Portland is lovely at night and many hotels are easily accessed by light rail. I often stay at the Red Lion, which is a bit more expensive than my usual lodgings, but you can usually find a deal online via Expedia or Priceline that brings the rates within easy reach.
There are, of course, tons of resteraunts and stores, including at least one Mall served by light rail. The minor league ball park is right on Max, and so is Lloyd Center which hosts a multitude of events. They also have a basketball arena someplace down there, but I don't follow B-Ball, so I can't recall exactly where.