[Arubalisa]

I do not blame you for being overwhelmed by all of the options.

We are very interested in the Divi and Tam option - i know that there are various pools available - my dd is wondering if any have a water slide and where is it located in relation to the Tam/Divi AI - is it a long trip between pools?

There is a beautiful pool with a slide at the Divi Links Golf Villas located between the Divi Resort and Tamarijn, but across the street. Depending upon who you talk to, you can or cannot use the pool there. The bar is not included in the all inclusive. The Villas were not yet constructed when this photo was taken http://www.wikimapia.org/#lat=12.538...16&l=0&m=a&v=2, but you get the idea of the proximity between the resorts.

The swimming pool at the Tamarijn is the magnet for kids. It is plain, but the kids get wet.

The towel hut offers floats and noodles, including in the all inclusive package.

Also as much as i like the idea of being right on the beach i am bothered by reviews that i read suggesting that ppl from other rooms can take over the Palapa directly in front of your room - does this really happen? I would not like to leave my patio and find strangers hanging out right in front of my room.

Yes, it can happen. It has happened to us, twice in two visits totalling 24 nights. All palapas are first come, first served. You cannot pay to reserve them in advance like at the Hyatt or Westin.
Our past visit last month there was one palapa in front of our section of rooms. We have found that just like when we stay at the Radisson, you have to get up early to get a (the) palapa. From what I understand the Costa Linda does have one palapa for each unit.

As much as we love the Radisson, we have come to the conclusion that by staying at the Tamarijn there are tradeoffs.

Radisson- walk to the beach, with a likely chance that you had to ride an elevator just to get to the lobby
Tamarijn- walk out of our room onto the beach. Not an issue for us, but if you have the palapa in front of your room, easily sit out on the beach while your child naps and the "potty" is RIGHT there.

Radisson- our dd loves to eat, and we are talking shrimp and lobster, not hot dogs
Tamarijn- kids stay and eat FREE. They don't serve lobster, but we do have some dinners off property with the money we save. She eats Shrimp everynight that we eat at the Divi's Red Parrot

Radisson- the beach is beautiful and the water is calm
Tamarijn- the beach is much quieter, less people, sometimes the water is flat, sometimes not

Also concerned about reviews about smoky rooms at the Tam - do they have non smoking rooms ? or do you run a big risk of having a smelly room?

There are no "non-smoking" rooms, between all of the rooms that our family booked last Christmas and the two rooms we were in during our past visit, 6 total, we did not experience any problems with a "smelly room". Be forewarned though that the rooms are NOT fancy. The bathrooms are outdated, but everything is clean.

Also are the Tam/Divi within walking distance of the Palm Beach Area ? and if so how long of a walk - we have 3 small children.

No, not within walking distance with small children. A little under 3 miles each way. The Costa Linda is about 2 1/4 miles from Palm Beach. The Amsterdam Manor is about 3/4 of a mile from Palm Beach.