A friend of ours living in Montevideo booked this hotel for us and we were very happy with our stay. We stayed there in two stages (split by a trip to Buenos Aires) for a total of about ten nights.
Yes, the decor is dated, but everything was really clean and the service was excellent. The staff were all very friendly and helpful, and most of them spoke some English. They really went out of their way to help us with things like public transit directions, etc. I would rate this a one-and-a-half to two-star property, and great value.
Breakfast, as the other posted has noted, is plentiful, although the coffee was not brilliant (there's a great place just around the corner though) . We had them call us a cab plenty of times and never got ripped off, so I suspect that the other poster's experience came down to an unscrupulous cab driver rather than some kind of hotel taxi racket.
The location of the Hotel Klee was very central, just a block off the main street (Avenida 18 de Julio), one block over from the Museo Municipal, and right opposite an artisan market.
We're heading back to Montevideo in December 2007 and we will definitely look into staying at the Hotel Klee again.
This review is the subjective opinion of a TripAdvisor member and not of TripAdvisor LLC