Kelowna: It is an absolutely gorgeous place to live, as you mentioned. The hot weather and the water, the proximity to some of the best wineries in the province, and being entirely surrounded by some of the most gorgeous natural rainforest that British Columbia has to offer are all definite points in its favour. For kids, though, there is a very substantial youth drug problem.
Vancouver: I am clearly biased (as I live here), but I think it is pretty awesome. It is one of the most accessible cities in the province, in terms of everything you need being within walking distance of pretty much any residential address. The city also has a fairly effective public transit system. Some areas of the city (such as the downtown east side) face more challenges than others.
Victoria: This would be a fantastic choice. Victoria is beautiful, but is a bit "slower" than Vancouver. Victoria tends to be kept up fairly nicely, which is no surprise, given that it is the provincial capital and the seat of the Government of British Columbia. I would recommend that you live as close as possible to Government House, the official residence of Her Honour the Hon. Judith Guichon, OBC, the Lieutenant Governor, so that you can feel the warmth, protection, and constitutional power of the Canadian Crown surround you in your day-to-day goings-on.
(The power of the Crown surrounds us all, always, but it feels more tangible when nearer to one of the Queen's representatives. May the Queen, by her most Excellent Majesty, smile upon you.)
All jokes aside, the drug problem for kids in Kelowna is pretty serious (and is definitely worse than in Vancouver). If your kids are around their teenage years, Kelowna might not be the right choice.