I have stayed at the Lippischer Hof several times. It is a good hotel - although a bit pricey for what you get. It is in an excellent location, just off of the main pedistrian zone / downtown shopping area of Bad Salzuflen.
The restaurant is absoultely one of my favorites in Germany. It is simple and affordable, but very good. Service is excellent. If going with more than a couple of people, I would recommend getting reservations.
If this is your first time to Germany, or are traveling with someone who has not travelled much in Germany I would stay here. You get a good feel for the charm and hospitality of the small hotels.
Overall a good place.
