Car rental in Malaysia and tips (travelling with kids)

After years of almost going to Malaysia and ending up in Thailand anyway, we have finally booked out flights into Kuala Lumpur on the 31st of December. We'll be travelling with our 2 sons (4,5 and 1,5) and we're thinking of doing the following:
- 3 nights in KL
- 2 nights Cameron Highlands
- 2 nights Bukit Merah (water-park and eco-park for our 4-year old, also maybe the orangutan island)
- 3 nights Penang (food & culture)
- 6 nights Langkawi (beaches obviously)
- then back to KL
We don't want to spend 1 night in a place, since it will be too rushed, I think. From travelling with our kids before, I've learned to take things slow. But what do you guys think of our itinerary?
Also, what should we do for transportation? Should we hire a car (but how are the driving conditions?), to drive to Penang ourselves, then fly to Langkawi and then back to KL? I've read about people hiring a car with driver, is that a better idea? Or would that be super expensive?

Thanks everyone!

The itinerary is fine. You have the option of travelling from place to place by taxi (you'll have to negotiate the prices) or by rented car. Car renting is easy (I did it this year for the first time).

Driving conditions are ok. Sometimes it's unclear how fast you are allowed to drive and where the urban areas end (although the latter does not really matter that much actually). Most Malaysian drivers are not too terrible, although every now and then there is an idiot who wants to overtake when there isn't enough space.

BTW, if you self-drive it's important to have a navigation system. I used an Android Smartphone with the Sygic navigation app. Its Malaysian maps are not bad.

Thanks for your reply, Alfred! It's good to know that driving ourselves is a good option.