We have stayed at the Kauai Marriott Resort using points. Kauai is our favorite island, and it's a great resort. Also, a couple tips on booking Hawaii using points: Book early, and be flexible. Book on the inernet if you can, and you can always cancel later if your plans change. It seems that the Maui resorts are the first get get booked up, while the Marriott resort on the Big Island almost always seems to have the best availability.
Last year, we booked our honeymoon to the Kaui Marriott in Lihue using points. I highly recommend the "hotel + air" travel package which is what we did. It cost us about 200,000 points which includes 7 nights hotel AND a transfer of 70,000 airline miles (enough for two round trip flights) to your favorite airline frequent flyer account. I think this is by far the best value with using points.
You have to book your own flights using the airline miles, but it's worth the effort. I recommend planning this way in advance since flights for 35,000 miles can sometimes be hard to come by, depending on the airline you are going through.
Also, if you wanted to travel around Hawaii over the course of a week, they also have a hotel sampler travel package for 150,000.
I agree with the post about the Lihue Marriott. The hotel, beach and pool are great and in a perfect location to get to all the points of interest on the island. You can rent a Hertz car AT the hotel and save on the airport fee and only have the car for the days you want to use it. We used a 6 day and a 3-day award together and wished we could have stayed longer.
While there, we went to the Vacation Club Sales Center and bought one week at Waiohai Beach Club, but still spend a day or two before or after at the Marriott.
If you are looking for an amazing experience I would recommend the JW Marriot at Ihilani. My wife and I used a 7-night stay at that location in 2006 and found the resort amazing in itself and from its location.
Removed from the hustle of Waikiki, you are still only a 30 minute (tops!) drive back to that area. Around the resort itself are multiple man made lagoons allowing the enjoyment of the ocean and sealife under controlled conditions more so than open surf. The japanese restaurant as well as the breakfast buffet were stellar at the hotel.
I cannot offer much insight into the air travel as we used points tied into the VIP vacation package to fly.