This was my 4th trip to Hangzhou in 2 yrs & my 2nd stay @ Amanfayun.  Of the 3 hotels in the area (banyan tree, 4 seasons, Aman), this is still my favorite. 4 seasons would be my 2nd choice.  

The 4 seasons (5 min cab ride away) has a beautiful manicured Chinese garden & very good restaurant JinSha, overall a very nice hotel.  I just love Aman for the experience & their staff (ie people like Bagi, their Indonesian manager ) really make you feel like you're staying w/friends.  

Pros:
Quiet - if you are looking for easy access to Westlake, shopping,  throbbing nightlife .....Stay @ the Hyatt by the West Lake.  An ideal break for me is to go off the radar, @ rustic Aman you can just roll out of bed to go for a hike, visit the Yuan dynasty buddhist grottoes ( some are on the property and easy to find), watch ceremonies @ the temples & etc., but most of my more fashionable friends from Hong Kong would  prefer the Hyatt or 4 Seasons.  

My last visit (3/2010)  was when they had 1 of their freak storms; this time weather was perfect, sunny, no bugs, just perfect hiking weather.  

More food choices now as well (used to be western only & the tea house) they have added the steam house, the hangzhou house (real Chinese foos), a veggie place owned by lingyin temple (best described as creative fusion, good for Western palettes, no alcohol allowed...I prefer more traditional food... ie organic food at the Dragon Well Manor 10 min away, but friends w/me on this trip ( from Miami ) definitely found some of the dishes at DWM too exotic/strange.  

Room for improvement
1) Lighting.  I said this in my previous review.  The rooms are too dark.  Yes ancient China had dark lighting & Aman is trying to recreate the ambiance, but do give guests more ways to brighten up the rooms.   
2) Traffic in this area is getting worse, it took ages to get to the Hyatt by the West Lake ... Most cabs also have no idea how to find the Aman
3) Expensive:  there are only 40ish rooms, but Aman has a high staff to guest ratio ( 178 on their payroll, 27 that are not on permanent payroll but work there ) so I understand why everything is so expensive.   But it does add up. Ie. at this price, at least breakfast should be included.   Ouch! 

But in sum, in a country that prizes all things modern, Amanfayun is a rare find.  

We staid at Amanfayun 3 days in October 2011. It is as close to Paradise as possible. A really enchanted place, where it is natural to slow down and relax, taking in the refined beauty of the village-hotel, its creek, the pilgrims to the temples passing by, and underneath it all the almost invisible and yet perfectly efficient network of hotel services. Only problem to mention: mosquitoes (they too invisible, of course) can be a problem. Selectively, though: they bit my husband savagely, did not touch me.

Let's start with the things you absolutely need to prepare before visiting Amanfayun to ensure you survive: #1 bring a very strong insect repellant - the mosquitoes and midge flies are relentless and there is nothing you can do about them ... short of wearing full-body netting! #2 bring very comfortable hiking shoes and preferably a Nordic walking pole. Anything worth seeing in and around Amanfayun, needless to say in Hangzhou as well, is off the beaten track. I would recommend you also bring a machete but I doubt you'd be able to get one on a plane so ask the concierge for one when you arrive. #3 Pick up a bottle of something from duty free on the way - chances are you may need to imbibe while you wait for anything you've ordered from room service. Provided you come armed with those 3 items your stay will be fine!
In all seriousness Amanfayun is reminiscent of Aman at Summer Palace - although at a much slower pace. The opulence and style of the villas are quite similar and most remarkable is how Aman has managed consistency with the extremely low light levels inside. (Thank goodness they provide a flashlight in the villas!)
In addition to flashlights villas come complete with thoughtful provisions such as straw hats, tote bags, watered-down insect repellant, a mosquito coil and delicious teas which make this region famous, but let the guest down in a few simple areas such as no ice in the evenings at turn-down, no replenishment of mosquito coils, and something we love so much about the Aman - no jar of cookies in the mini bar! But all that can be overlooked.
Walking in and around Amanfayun you quickly understand what is Aman and what is the village. Although not a stark difference between the two, the presence of guards at strategic locations weed out tourists while allowing through guests, monks and villagers. If you ignore the heated pool, CCTV cameras and other modern additions you really do feel like you are in a 1940's Chinese farm village - I think. Despite being right next to one of Hangzhou's most famous temples teeming with tourists the village of which Amanfayun is a part is exceedingly tranquil. The gaggle of Aman geese are a treat to watch swim in the stream or parade through one of the tea houses. The guards on 8-hour shifts 24/7 are helpful in reminding you a few Mandarin phrases but unfortunately not able to provide suggestions on activities. We had expected to be busy hiking, going on private temple visits, harvesting tea, learning the art of making tea, having chats with monks and other obviously over-the-top unique experiences but were disappointed that even the front desk were unable to provide reliable information to make any of those a reality. A suggestion to visit the Longjing Village (famous worldwide for its tea) for example was described as a 30 minute stroll but in reality was a 90 minute trek. The additional suggestion to wake early in the morning to climb the nearby mountain was thoughtful, however the request for a guide seemed a foreign one. Fantastic accents to the village such as the Rock Buddha Walk featuring intricate images of Buddha carved into the rock face of a hill in the middle of Amanfayun are so over-grown they are entirely inaccessible and hence extremely frustrating.
If you literally are happy to spend your entire time ensconced in the villas, reading books by candle-light and eating all meals on-site, you won't be disappointed. However, not all of the restaurants in Amanfayun are run by Aman (see other reviewers' notes). The Steam House and The Restaurant which are, are top quality, very comfortable and happily the prices are very reasonable!
The spa and pool seem to have a few issues mostly related to staff, or lack thereof (enough said) but Aman redeems itself with their incredible private bath houses available for couples or individuals. These veritable residences contain a large wooden free-standing tub with plenty of room for 2. Two Japanese-style washing vestibules compliment 2 separate showers inside a steam room. The provision of a sofa for a post-soak nap is thoughtful and could only be improved upon by offering tea!
Bottom line: when coming to a place like Hangzhou you really owe it to yourself to get out, see some of the basic sights such as the West Lake and a temple or three and spend time drinking the tea and soaking up the culture that is the seasoning of this city. Is a stay at Amanfayun going to enhance your time in Hangzhou? Only slightly. When you consider that a full-service property such as Four Seasons is in an infinitely convenient location and a few hundred dollars cheaper than Amanfayun it does make you think twice. Its been a year and a half since Amanfayun opened but unfortunately there appear to be issues related to service that make it feel like a new-comer. Item #4 to consider is a taxi hired for the day. Not only is Amanfayun in one of the most obscure locations in Hangzhou that is known by few, calling a taxi seems to be unheard of. Most taxi drivers are very friendly and are open to being hired by the day for RMB 200-400 so consider making an arrangement with a driver you are comfortable with and have a private chauffeur during your time in Hangzhou - it will make your experience so much more enjoyable.

I should've written this long time ago (we visited last December), hope the comments can help the people interested in this resort.

The resort is located at one of the most beautiful areas of Hangzhou, i.e. right next to the Ling Yin Temple, which is also my favorite place in Hangzhou. Last time I visited Hangzhou was 7 years ago, before the resort was built and the area was just a village. Today, it still looks like a village, no signs, fences or gates erected to tell people this is an Aman resort, and I'm sure most of the tourists passing by to the temple are ignorant of the fact. All the village houses looked just the same from outside, althoug each one of them have been completed renovated inside to the Aman standards. This is what I love the most - Aman luxury discreetly hiden beneath the facade of a local village.

Staying in this resort makes you forget about time. Everything was so peaceful and quiet. High tea was offered every afternoon in the library, a girl would play the Chinese instrument. Ling Yin temple is just next door so that adds to the tranquility.

Room is spacious and tastefully decorated. I agree with people's comments about the lighting (i.e. a bit dark), but it was not that bad and didn't cause us any inconvenience.

Food was YUMMY, we tried al the restaurants in the resort and all of them very very good, both Chinese and western foods.

Service was impeccable. Starting from the 2nd day of our stay, all the staff (including those in the spa and restaurants) knew our names, and we were never for once asked for our villa number when we signed the bills, all of them just knew who we are. The Indonesia GM was constantly seen touring around the resort, day and night, in and out various facilities, making sure everything was in order, we rarely saw that happen in other resorts. He even served our dinner one night when he happened to be checking out the restaurant...

So you ask me whether we will return? YES definitely.