Aloha eboy,
I’m a Maui resident who lived in Lahaina/Ka’anapali for 4 1/2 years and have now resided in Kihei for about a year. You’ve picked the two best areas for tourists and families, so nice job on narrowing down your options!
Now, I do not know the demographics of your family (very young children? teenagers?) or your budget (economy? splurging?) and these two things may change your decision. Also, for the sake of this message, I am going to combine Lahaina and Ka’anapali into one area because they are so close together that they are generally considered the same “side” of the island. In other words, anything you can do in Lahaina, you can do quite easily from Ka’anapali and vice versa.
As a long time Lahaina fan, I would say that staying in or around Ka’anapali/Lahaina would be a great option for families. There’s lot of beaches, shopping, restaurants, snorkeling, boat trips, etc. Also, depending on the time of year that you come, there are whale watches or parasailing and jet skiing from Lahaina. Kihei does not have jet skiing or parasailing but does offer whale watches in the winter time.
Kihei has a lot of condos so this may be good for you, depending on what you’re looking for. The Lahaina/Ka’anapali area has condos, but the ones for rent are usually a little further north in Honokowai/Kahana/Napili. However, Ka’anapali is a resort area so expect hotels like the Westin, Sheraton and Hyatt to adorn the beach. Lahaina has smaller hotels like the Pioneer Inn and Lahaina Inn which are less expensive. Kihei doesn’t have many hotels, but Wailea is where you’d find resorts such as the Four Seasons, Kea Lani and Grand Wailea. Expect to shell out big bucks for those places, though. Kihei also has some nice beaches, a pretty nice public park for younger children but has skateboarding and a roller rink for older ones, surfing, snorkeling, etc. I do think, though, that the snorkeling is better on the Lahaina side, unless you find yourself down towards Makena on the south side of Maui (Kihei side). Kihei and Lahaina both have a good amount of restaurants as well to suit all budgets.
Personally, and this is my biased opinion, I would chose Lahaina/Ka’anapali. I think aesthetically it is nicer than Kihei (though I do love Kihei - just Lahaina better). I think the beaches on the Lahaina side are better, and depending on conditions, are better for younger children. I also think there’s plenty to keep a family occupied in Lahaina. The only draw back to Lahaina and Ka’anapali is the distance from Kahului. If you plan on doing a lot of activities Upcountry, in Kahului or Hana, Kihei may be better situated. Its still possible to see the entire island of Maui from Lahaina, just expect a little more driving time. And, unlike most commutes on the mainland, the shoreline drive into Lahaina isn’t such a bad place to have to spend a little extra time on.
Well, I hope this gives you some things to consider. I think either area that you end up with you and your family will love. Maui is such an amazing place. Good luck!
Aloha!

I’ve always stayed in Kihei because it has the widest variety of reasonably priced accomodations close to the beaches. Lahaina is well worth visiting for the sights, but it doesn’t take long to get there from Kihei. I recommend visiting the Maui Ocean Center too. It’s an excellent aquarium.