I stayed at the Hotel Isole for a night last month (July 2010). The city is very crowded in the summer but the hotel was quiet and calm, despite being ideally located just off the main shopping street. It's tucked away around a corner down a narrow alley, and the room felt like a little hideaway. The owners were very welcoming and the hotel is a great value. I'd recommend any solo traveler, or couple on a budget, to base yourself here and enjoy exploring Rhodes.
Everything is small, like all of medieval Rhodes, but clean, well kept, and with a good shower. Decor is basic but again clean and very sufficient.

Hotel Isola was a welcoming place to find in the heart of Old City Rhodes. Although Rhodes was cool and pre-season for activity, the operators, Guido and Luisa were warm, welcoming and helpful. We were directed to a REAL Greek family restaurant "Meyiotov" and a delightful afternoon music bar "Mupobohies" and provided with information about sites and stops around the island. Everything... the cheerful blue decor, extenive travel books + extra novels, unique rooms including a roof terrace, resident cat, happy hour at the bar, interactive owners.... made up for a great stay. We were only a little letdown by the Greek breakfast that didn't live up to our Turkish experiences. An enjoyable spot and interesting city to explore.

If you're in Rhodes to visit the city rather than to get a tan at the
beaches, and if you're looking for two-star accommodations,with breakfast included, then you should give serious consideration to Hotel Isole. It's located in the historic old town of Rhodes (this means taxis cannot drive you to the hotel door and you have to haul your luggage from the city's gate some 500 meters to the hotel) in a quiet narrow street, just off the main pedestrian thoroughfare. The hotel has only a few rooms but all are decorated with taste and include a bathroom and TV. What makes this hotel so special is the reception you get from Louisa and her husband Guido. Between them, they speak some half-dozen languages and every evening, guest gather around the main lounge bar and share their stories over a glass of ouzo or local wine. Both Louisa and Guido know Rhodes intimately and will provide excellent tips on what to do, where to eat, where to get a good deal on a rental car, what to see in the island, etc.