Which place are you actually moving to? Logistically speaking, Watertown and Beaver Dam are about 35 minutes apart.
We considered moving to Beaver Dam before we finally settled in Watertown. Beaver Dam, at least to me, feels more rural than Watertown. Housing prices are also a bit cheaper in general. The area is growing, and it seems to me that there are a lot of young families in Beaver Dam. (The price is right!)
As I understand it (I was told by a realtor), Beaver Dam lake is a mud-bottom lake and better suited to fishing than swimming. But it's an enormous lake and very pretty. Beaver Dam also has a great park and they have a festival with some of the most awesome fireworks I've seen the weekend after 4th of July.
Watertown is a bit larger and has a few more conveniences than Beaver Dam. We've found the school system here very good. Watertown also has a festival every summer (first weekend in August) with a craft fair, carnival, and even better fireworks than the ones in Beaver Dam. (What can I say? I like fireworks! lol) There are a ton of great places to go swimming and fishing in nearby Oconomowoc (lakes galore!) Watertown is all about rivers! Watertown also has a wonderful community aquatic center with a couple water slides. It stays very busy during the summer (it's outdoors and only open in the summer while the kids are out of school).
Watertown is mid-way between Milwaukee and Madison. Depending on where you're going in each town, a trip there is likely to take you around 35-45 minutes. You're reasonably close to Interstate-94 which leads you either west to Madison or east to Milwaukee. While Watertown isn't exactly a cultural mecca, you'll find a lot to do in both Madison and Milwaukee.
As far as conveniences go, Watertown has a super Wal-Mart, a couple of decent-sized grocery stores, a Shopko, a hardware store, and some of the usual suspects when it comes to fast food and/or chain restaurants (Applebee's, Ponderosa). There's a Kohl's department store and a Menard's down the road in Johnson Creek, as well as an outlet mall.
For what it's worth, my family loves Watertown. The community is friendly and, once again, the housing costs are reasonable compared to nearby Waukesha county where they're significantly higher. You're a little further away from southeastern Wisconsin's major cities, but it's a great place to live.