My husband and I stayed here for a week, and loved every minute. The bed was the most comfortable we have ever slept in, with sun-dried cotton sheets. The restaurant was amazing, both for its view of the town and the excellent cuisine. For Valentine's Day, the staff filled the upstairs mirador with candles and set up a table just for my husband and I - it was wonderful, and very romantic. We had secure off-street parking for our rental car. The hotel was quiet and restful, exactly what we wanted. Because the staff speaks minimal English, I would suggest that you have some Spanish, and a handy Spanish dictionary, if you plan to stay there. My husband and I had no problems communicating with any of the staff, and they were uniformly helpful and friendly.

We stayed here for 2 nights in June, 2006. Having come from Morelia, where we had stayed in a noisy hotel, we wanted a quiet one that was just a little away from the centre, but still within walking distance. This was a good location for us.
We didn't have reservations, but that was not a problem. We got a very beautiful room on a quiet side street. Other guests who had a room in front, facing the basilica said that the bells bothered them at night, but we did not hear them. (Always travel with earplugs and eyeshades, that's my motto.)
It was certainly more expensive than we expected - reception staff said the prices displayed on the internet were not correct. However, the beauty of the room seduced us - dark woods, big white duvet, fireplace, gorgeous hardwood floors, lovely bathroom. I did negotiate a small discount and complimentary continental breakfast.
Still, it was the most expensive place we stayed in during our travels.
The restaurant has a great view and, as a bonus, there is a glassed in room above it - a "mirador" from which you can view the town - red roofs and courtyards, a glimpse of the lake and the rain coming. We liked to sit there at twilight, sip a glass of wine and read. I don't know if we were encouraged to do that - there wasn't really any comfortable seating and one evening a table with the remains of lunch sat there all evening.
We had planned to stay 3 nights but left after 2, because it was just too quiet for us, and also due to the cost.
The staff were pleasant and friendly, and we were even able to get our laundry done, which we much appreciated. However, we wondered if the manager was on holiday while we were there.
On day two, we returned to our room to find the bed carelessly made, with the covers roughly pulled up. The sticky blob on the wood floor in front of the fireplace stayed there for the whole time we were there. There were no towels. This is an expensive hotel, folks.
We were amused one evening - a young man came up and put little votive candles all around the windows. It was beautiful! Then we found out why - a VIP appeared - a travel writer and his escort - who stopped to have a complimentary margarita before leaving to visit more hotels. As soon as he left, the young man appeared, blew out all the candles and left us in the dark!
The same at breakfast - travel writer appeared and got overflowing bread basket, nice plates of fresh fruit, etc. We got a tasty but spartan basket of toast. They did bring some fruit on the first day, not on the second.
On departure, we were not given the usual itemized receipt. The cost was scribbled on a scrap of paper. Strange, no?
Anyway, the staff were nice and it is worth going to enjoy the view. We did meet some other guests and sit and chat in the pretty courtyard, until it was time for quiet hours.
But we wouldn't go back.

My husband and I stayed at Posada la Basilica 1 night but would have loved to have extended if time would have permitted. The location is excellent--situated in front of the Basilica and in the midst of shops, restaurants, etc. The 2 squares (large and small) are a very short walk--3 blocks no more. The rate for a king size room was around $75USD and the room was absolutely charming. The staff said that the hotel was renovating and our room was one of the newly finished rooms. I peeked at some of the other rooms that had been renovated--they were stunning and the 2 I saw had enormous claw-footed tubs. Our room was clean and warm with wood floors, a very comfortable bed and classic pieces of furniture. The bed linens were of great quality and the heavy blanket and monogramed duvet kept us warm when the temperature dropped at night. We especially enjoyed the fireplace and the tiny little glazed terracota figures they left in lieu of chocolates at turn down. We did not have a chance to eat at the restaurant, but hope that we will have another chance to visit in the future.

The Posada de la Basilica had a courtyard under renovation when we stayed there, but it was still a beautiful and comfortable choice. The inn is located at the top of a small hill near the famous basilica, and it is a quiet, restful place. Staff is helpful, and the food and views at the restaurant are excellent. Though it doesn't have the warmth of other inns, it is a lovely property.