Below is a list of things to do with the kids while in the Ft Walton Beach/Destin area:

www.bigkahunas.com    Great water park/putt putt place!

www.ecscience.org    Nice little hands on science museum. Not huge but still fun. My 12 yr old stepson even enjoyed it.

www.gulfarium.com    This is kinda like Seaworld but smaller. They have dolphin shows and such.

www.destintrack.com   This is a small amusement park. They have Go Karts, putt putt, arcades, etc.

These are just a few things to do.
 
You can also visit
www.rentfortwaltonbeach.com/attractions.htm
 for other family oriented things to do here.

Thanks!