Passports aren't actually required to enter Canada - a US drivers licence/birth certificate will do. You will, however, likely need a passport to re-enter the US.
You definitely need to be covered for automobile insurance, although I doubt anyone would actually ask to see it (unless you're in an accident or pulled over for a traffic violation). For the most part, Canadian auto insurance covers travel in the US and we don't need any special documentation/notification to the insurance company when we cross the border - I don't know if the reverse is true, so it might be a good idea to call your insurance company and ask.
A little booze is fine - a 26er of liquor or a 24 of beer per person; a carton of cigarettes is ok as well. Fruits and vegetables are mostly banned as well as some non-US meats. Its about a 10% chance that they even ask, but you may have to throw out your bananas and potatoes at the border. Bread and condiments and all that type of stuff is fine - so you may want to just bring that and plan on a quick trip to the grocery store on this side of the border.
Our gas is expensive - brace yourself to pay 20-25% more. But, we don't have nearly as much ethanol in our gas, so you'll get slightly better mileage.
If you're bringing pets - make sure you've got dated papers on letterhead from your vet (tags are not good enough) showing up-to-date rabies shots - papers should clearly identify the animal by breed and colouring. And, pit bulls (including crosses and dogs that just happen to strongly resemble pit bulls) are outright banned. As a non-resident, don't even try to argue 'cause you'll be turned back.
The trip between Niagara Falls and Barrie is mostly 4-8 lane highway. There aren't a lot of picturesque camping stops. I'm not sure what your intentions are for this part of the trip - do you plan on making your way into Toronto? There are a couple of handy parks on commuter train routes which would be your best bet.
Oh - do head to Niagara on the Lake on your way toward Toronto (its not far off course). Walk around downtown and visit the dozens (and dozens) of shops. This is a great way to score points with your wife.
Everyone will suggest Algonquin Provincial Park - and I strongly agree for at least a 3 night stay. If you're just driving through, stay at Arrowhead Provincial Park which is gorgeous and not nearly as far out of the way. Grundy Lake and Killbear are also favourites along your route. Between Sudbury and Sault Ste Marie, Chutes Provincial Park is a nice little park for a night. If you're an Arrogant Worms fan, you might want to stay at Gordon's Park on Manitoulin Island (its barely 30 minutes south of your route) - just to see the Mounted Animal Nature Trail; if you're not, then the lack of nostalgia is definitely not worth the trip.
If you want to go just north (2 hours) of Sault Ste Marie, Lake Superior Provincial Park is well worth a stay as well. Its a gorgeous park with much to see.
Finally: much like our gasoline, our provincial park rates are high - so brace yourself for $40-49/night. Also, you'll need 75' of electrical cord and will almost always have to level the trailer. No provincial parks have on-site sewer or water, so visit the sanitary station to fill up with fresh water on your way into your site and dump on your way out.