We stayed here for one night in July. The owner is a really lovely old man who is friendly and helpful.
We had a room on the first floor. Our room had 2 single beds, sink & shower, table, tv and balcony. The toilet was located next to our room, don't think there were too many people staying there as we never had to wait to use it.
The rooms are rather outdated but it doesn't really matter as we were really comfortable there.
The hotel is about 1-2 minutes walk from the main street and the train station and close to many restaurants and bars.
The breakfast in the morning was fantastic, a great range of food and the breakfast lady was very attentative.
I would definitely come back here again for another stay!

I would not stay here a second time. The positives are a pretty good location (although it was challenging to find initially) - and the rate was ok given the cost of zermat - and there was a high water pressure in the shower. We email to confirm the reservation and never received a response. We later called and let the owner know we might arrive after 9 and he said "just make it by 9" and hung up. The place seems like it was decorated poorly in 1973 and hasn't had a nickel in upgrades since. Every step in the room results in a major creaking noisE. Sitting style shower that was difficult getting into and out of. Sink outside bathroom in sleeping area. Curtains are thin so at night with them closed if light on people can see in. Good Matterhorn view from breakfast - descent buffet The coffee is watered down. Breakfast service was good though. Overall, even though the location and cost fit what we were looking for it was just too old and run down for us.

I just got back from a 4-night trip to Zermatt, staying at the Cima Garni. This is a great value. Owned by a a nice elderly Italian man who lives onsite, it's a homey B+B. I paid about $60/night in high-season ... can't beat that.
Pro:
Location: Awesome, awesome, awesome. It's less than 200m to the train station, 2 of the 3 village lifts to the slopes, the village grocery store, and the main street with restaurants/shops. And if you want to take the Matterhorn lift (about 1km on the other side of zermatt), the free village bus starts its run near the train station and you'll be one of 5 people (out of an eventual mob scene of 50+) to have a seat.
Breakfast: I've stayed at alot of european B+Bs. Breakfast at cima is above avg. They have a starbucks-like giant coffee machine that produces excellent coffee. Nice assortment of rolls, yogurt, cheese, etc and all you can eat. Breakfast room has a perfect view of the Matterhorn and they have a girl bringing coffee to your table. I ate so much I was able to skip lunch.
Basics: Cima gets the basics right. There's a ski room in the basement with heated racks to dry your boots. My room had cable TV, though only 3 out of 40 channels were in english. Rooms and bathrooms were clean and they have daily maid svc. The owner is friendly and helpful with advice. Though it's in a central location, by 11pm it got very quiet and I had no trouble sleeping.
Cost: very cheap. Zermatt is an expensive village. You can't go to a sit-down restaurant/cafe for less than $30/person and most are $50+ and there aren't many take-out options (of course, like the rest of europe, wine is amazingly cheap). Save your $ for ski/food and stay at Cima.

Cons:
Run-down: this place ain't pretty. The room was tiny. All of the furnishings are worn, old, and cheap. Walls are thin and you can hear people walking around. My room didn't have a bathroom and the one in my hall didn't have a shower so I had to use the one in the basement, which was about 2ftX2ft.
Pre-internet. though I managed to book my room via a web-based booking agency, cima isn't internet friendly. I don't think they even have a computer onsite and there's no way to communicate with the owner via email. He maintains his financial books with pencil/paper and accepts only cash.

Stayed for a week with friends and family and found the hotel perfect for a no-frills sporting holiday. Rooms are slightly outdated, but this is not what i personally like to pay for in a ski holiday. Breakfast was good and skiboots were dry every morning. The location is very good for the Gornergrat + Sunnegga trains. (After a heavy night, the 30 min GGrat train is a perfect wake up for a new day). No problems with reservations on our part and the staff were friendly, helpful and patient with our lack of proper command of any swiss language. oh, and our rooms had a nice view of the Matterhorn.