We stopped for two nights over a weekend on a B&B basis.
The (minor) negatives first:
Difficult to find (even with TomTom) but defintely worth the trouble... that's it!

Positives:
In a fabulous location overlooking St. Peter Port, close enough to be really accessible, whilst not in the middle of noise and traffic, etc.
Hotel was clean and spacious; the staff were very helpful - nothing was too much trouble.
Room was fabulous, with a great, fangled shower thingy, wotsit. Decent sized balcony with nice furniture - even an iPod dock thrown in. Modern decor, lovely bed... if we were being picky we'd have appreciated a fridge, but that's just being fussy.
We only sampled breakfast, which was delicious, served up in a wonderful dining room with views overlooking the harbour - wow. Lots of choice, plentiful, no need to feel guilty about ordering extra of anything.
All in all, thoroughly recommended.

Great location, great restaurant, great service. However some rooms suffer from proximity to the restaurant and the local chavs love the combination of the Rib Shack and the racetrack down the hill. Whilst we didn't try any other rooms I suspect that those round the corner from the main building would be best.

Echo the comments about finding Le Fregate - took us two attempts in a car, but once you get there this a very polished hotel with great decor and nicely furnished rooms.

The view over town is excellent and in the summer I can imagine a few drinks on the terrace!

Room was very comfortable, nice touch of having an ipod docking station and a spacious bathroom.

Highly recommended.

Despite it's prominence on the St Peter Port skyline this hotel isn't the easiest hotel in Guernsey to find.
Situated at the end of a narrow " lane " the view from the car park is an excellent first impression.
We have been coming to Guernsey for twenty years but only ever eaten here for dinner, some years ago now, so we booked in for a long weekend and upon arrival the staff were welcoming and informative. We were left to make our own way to our room, which I thought a little odd for this standard of hotel.
The room was spacious and clean, adequately furnished, the bed was large and comfortable and the view was spectacular.
The en suite was also large and clean, with a seperate shower.
We stayed on a bed and breakfast basis as we prefer to sample the different restaurants that the Island has to offer. Breakfast here was of a very good standard. The staff were attentive and polite. Choices were good and cooked well with a side serving of the St Peter Port panorama each morning.
We had hired a car but it's a very short walk to the centre. The walk back up to the hotel may be a bit exhaustive for some people and it is not very well lit at night.
The view at night is just as impressive, if not more with the illuminated Castle Cornet colouring the picture.
Connection to WiFi is free and easy
Only "drawbacks" to this hotel for us were the lack of shower pressure and the hot water seems to take an age to come through. I had to resort to turning the shower on for quite a while, before I actually stepped inside.
The ambiance from the main street below seems to seep up through the terraces at night and can be quite noisy but if you are used to it ( I'm not, so I may be slightly oversensitive here ) it shouldn't be a problem.