These are all really informative, it's odd to me since we actually had a different experience. Not that the others are wrong though.
Our kids are 2 and 5 so pretty young, we liked NC, we dont do the outer banks though, for most of the reasons people posted. We go a little farther south, much more deserted.
We don't like really crowded places, our kids were able to just kind of run and play on the beach. Without the crowds we were able to see them the entire time. We really just did simple (boring) things like look for sea shells, go karts, DQ at night, ride bikes.
The heat was insane, but since our 2 year napped midday it worked out well. We would do the beach very early, then lunch and naps 12-3 then beach again or pool, etc.
Like I said this is a very limited group that would like this type of vacation, obviously people with older kids or who are looking for nights out would be bored!

I grew up going to Ocean City and of course, was used to hearing how declasse it was from the OBX crowd. So I was quite shocked after we plunked down a ton of money and drove all that day, sat in traffic to get to the Outer Banks. And for what? The beach seemed lawless, dogs crapping on the beach, people flinging frisbees at my head. Not nearly enough public beach access (we stayed across the highway) so we had to walk along the shoulder of a highway to get to the beach. Nothing to do at night! The kids, who were used to OC, were looking for a little fun. The rednecks who were there? Ugh. Some idiots pooped in our hot tub one night. That was fun to find that the next AM. Also, our towels were stolen off our porch. Firecrackers landed on our porch from the yahoos next door while my elderly mother was sitting right there. Practically lit her hairsprayed helmet on fire.

OC on the other hand? Great public transportation, clean parks (Northside), clean beach. Lots of entertainment for the kids: go karts, amusement parks, waterslides. Crabbing on the bayside...We will never go back to OBX. Don't believe the hype.

The only upside I see to OBX is the ability to rent those mega-houses so a large extended family can all stay under one roof. But we discovered there was way too much family time for our dysfunctional family unit.

I laugh when I see OBX stickers on a car because I know people just flushed a few grand or more down the toilet. No really, it's like a toilet.

Ocean City is like Rockville Pike with some water nearby.

Rehobeth is fun, albeit commercial, as is Bethany.

Don't know Outer Banks but just thinking about it makes me feel hot and sunburnt.

The Outer Banks are beautiful, but unless you plan to go with other families there really is not much to do.
The houses are great and you can rent them with pools and hot tubs, but the drive is long especially with kids under 5.

I would recommend Bethanny Beach. This is very family friendly with lot's of things for the kids to do.

18:12 - there is an amusement park, playgrounds, kid friendly restaurants and more right on the beach at OC.

Not saying it would be my first choice sans kids. If you want to be snobby about it, whatever I can't help you. I could easily talk beaches around the world, but I don't think you want to go there. Let's face it, we are three hours from the beach here and I am trying to be helpful to OP who may have grown up not so landlocked. But I am NOT going to schlep to NC for a beach when it is pure hell once you get there. For what, a brew thru and a pool? Really? Frankly, I completely agree with PP who said you can take one or two weeks rental and build a pool at your own house. But I suppose that makes too much sense.

Went to Rehoboth last year with kids who were 6 1/2 and 3 1/2. It was GREAT, plenty of activities for kids, decent enough places to eat, but I didn't want to gouge out my eyeballs (granted, I have a pretty high tolerance for kid stuff, and consider vacations with kids to be 95% about the kids having fun).

Didn't do the house rental this year but have done it in prior years with younger kids (when the oldest was 1 and 2), and it was really great to have that space. In fact, those years, we didn't do many activities except beach and playing in and around the rental house.

Two words: The boardwalk.

Little kids get bored. The boardwalk is fun.

Ocean City is kid heaven? How so? Not to be snarky, just have always tried to avoid Ocean City because I have heard it is sleazy. We used to camp at Cape Henlopen or Assateague and would do some activities on the outskirts of Rehoboth and OC, but, please tell me why we should spend more time in OC proper? Our kids are 7 and 2, if that matters.

+1 on the OBX haters. My ILs go there annually -- and hever leave the house except by car. One year, they never went on the beach! I always wonder why they don't spend the $12K an just build a pool, since that's basically the only reason they go.

Ocean City is Kid Heaven. Go.

Also OBX, has major, major traffic and one lane roads. You would be going from bad to worse there.

NP here. Saying there is absolutely nothing to do in OBX (for ANY age) is a huge understatement. Some people can't bare to just sit there for a week or two while they bake to death. If I want a pool, I can go down the street for way less money and aggravation.

Three kids under five? I would say Ocean City while they are small, compared to other options around here. There are many tattoos and pot bellies at any of them (ahem), so be it. I don't know any beach within a drive that isn't just a little (lot) scary.

Outer banks, real wilderness
Virginia Beach, more like a town by the beach
Rehoboth, sleazy

Ocean City is your best bet for young kids. Much closer than OBX or VB. OBX has nice beaches but there is just nothing to do there.

What are the major differences between these 3 beach areas. We are starting to look into renting a house for this summer. We have 3 kids under 5.