Me, my parents and my 2 year old son experienced perfect service in Villa Katarina. The owner of this small apartment hotel, Petar, lives in the same building and is always available for information, complaints etc. You can book excursions from him as well.
The rooms in Villa Katarina are perfectly clean, furniture and electronics brand new. SAT TV, CD player with radio and conditioning worked perfectly. Toilet and shower amenities (massage shower) were also very clean and new. Hot water was always available.
The view from the balcony was marvelous, but it takes time (about 20 min) to go down to the beach. To return you have to climb about 100 steps up the hill towards the hotel, but it is usual for Dubrovnik. If you have such fitness every day you can enjoy your pasta without any sorrow for obtained calories :).
The neighbors were quiet (mainly English speaking couples).
The pool was small and without heating, but in the evening the water was swimable. Apartments in Villa Katarina were perfect for me and my family, we could not wished better. But if you have small baby with pram you should consider that you need to carry it up the mountain very often if you stay in Dubrovnik.