My friend, her daughter (2 at the time) and I stayed in Carvoeiro last year and we liked it very much. It's a really pretty little place.
The beach is very safe for children it's not massive, but big enough for all and it was July when we went.
There are plenty of places to eat in town ranging from Portugese, Seafood, Italian, burgers etc. and numerous bars. The main square is quite busy on a night. There are supermarkets with plenty of choice if you are self catering.
The town caters for people of all ages. All of the people in the restaurants were very kind with Georgia, providing pencils and paper for her to draw and one even had a little play hut for kids.
Parts are quite hilly - we stayed in the Monte Dourado complex and the hill was a bit of killer in the heat, but honestly it was worth it as the apartment was lovely.

Hope that helps
Dawn

Betty - here's Carvoeiro town website for further info - http://www.carvoeiro.com/

Portimao itself is not a seaside resort - the beaches etc are at Praia da Rocha which is about 2 miles away from the city centre. Praia da Rocha has a very big beach but lots of steps down (and back up!) except for the eastern end. There are dozens of mega-hotels thereabouts and I would imagine it is heaving in the summer.

Hi we always stay in Praia do Vau which is just outside of Praia da Rocha it is only a small bay with a few beach restaurants /Bars but the most wonderful beach which if the tide is out you can walk on all the way to Portimao marina.You can walk directly onto the beach there and it is within walking distance of Rocha (about 30min Stroll) you can also easily get into Alvor (about 40 min brisk walk )or taxis which are cheap there is also a bus from Vau that will take you into Rocha or Portimao.There are only 2 apartment blocks by the beach but quite a few a short walk away.
Only thing is as said before it will be very hot and very busy in August

Only thing is as said before it will be very hot and very busy in August

Air conditioning will be a must - please ensure any accommodation you book has it. We go in June/July and wouldn't book anywhere that didn't have air conditioning.

We have stayed at the Rocha Brava complex a couple of miles outside Carvoeiro twice now and for me the two places you are discussing are like chalk and cheese. Carvoeiro is a resort with character whereas Portimao is more of a working town with very little character IMO. It has a nice marina but that is the best thing I can say about it. I don't think I would want to stay there myself. I posted a few photos of Carvoeiro on the HT photo gallery last year. You can see them at the link below.

We have also stayed in Carveiro (on 3 occasions )the reason we stopped is the hills that you have to climb to get out of the small beach area.It is a lovely place but Portimao also has its charms although i would'nt want to holiday there.Alvor might be a place to consider for a family

When you are on your holiday is there more to it than the beach and restaurants day-after-day?

If there is then you may decide on Portimão.
Portimão is the Algarve's 2nd city with a range of attractions and I don't mean more tourist shopping outlets! But extra activities for the whole family.

The river Arade at Portimão has a variety of activities including 'banana' boats that take you slowly and enjoyably all the way to Silves!
At Portimão you are next to Vau, Ferragudo and Alvor which have lovely beaches and ooze charisma of their own. The scenic mountains of Monchique are less than 30 mins away by car.

Having said that no-one stays at Portimão! Instead you'll be staying at the gorgeous Praia da Rocha, the seafront of Portimão. Here you will find a lively (but not mad!) holiday atmosphere + an amazing sandy beach with a length and breadth difficult to find elsewhere in the Algarve!

Sorry but if you stay at Praia da Rocha: everyday you'll have more choices to make! Prepare to enjoy!

http://family.webshots.com/album/69875624jNefMd?start=0