A few years back, while in Egypt for two weeks, my family of four (kids 8 and 11) sailed on a felucca from Aswan to Edfu (near Luxor) with another family of four on a second felucca. It took 3 days/3 nights and was an awesome experience. We hired local sailors (two per boat) and one doubled as the cook. We stopped in many little villages along the way and moored along shore during the nights. Each night we had a campfire on the beach somewhere and we met other felucca travellers from all over the world. One night we drifted on the Nile for hours watching the stars. The photo opps were terrific and sunsets spectacular.
As several people have already mentioned, you shouldn't go in the Nile river due to the parasites.
If you have time, the temples at Abu Simbel are fantastic and worth the trip. So are the Valley of the Kings, Karnak Temple and Luxor Temple (all in or near Luxor). If you visit the Valley of the Kings try to hire a guide with donkeys to take you in the back way over the mountain trail. Fantastic!
Hope you have a great time in Egypt.