My wife and I stayed at the Key West Hilton in early May, 2003, and absolutely loved the entire experience. Flew into Miami, rented a car, and meandered down the keys -- took about five hours because we stopped at the Islamadora Fish Company for a WONDERFUL lunch (we also stopped their on the way back). We were using Hilton points, and anticipated the usual "garden" view of the parking lot (they don't give the best rooms to people using points), but when we checked in and went to our expected room, the desk clerk came up to our room and said they needed that SPECIFIC room for someone in a wheelchair who needed to be closer to the elevator. He said he'd move us to another room, and "make it up to us." Did he ever! He put us in Room 101, right in the front of the hotel on the corner. Lovely room, lovely view. And for those who say the view is ruined by the cruise ships, let me say that if you are in Key West and intend to spend all your time in your hotel room, you shouldn't be in Key West in the first place! But for the five days we were there, the big ships (and they really are BIG) were in port only two days. But in port means parked DIRECTLY IN FRONT OF THE HOTEL. Not across the bay, not across the harbor. RIGHT in FRONT. But we were having a lovely outdoor breakfast on our second morning when the Disney Magic Cruise Ship came into port. Now, if you haven't seen one of those monsters dock, that alone is quite a sight. And the Disney ship blew it's welcome horn to the tune of "When you wish upon a star." It sounded like the mother ship from "Close Encounters of the Third Kind." So we were not bothered by the presence of the ships, nor the crowds of people. They change the character of the place, but the shops are so clearly dependent on that tourist traffic, that you can't really find fault with all those folks. Besides, they land at 10AM and generally have to get back on board at 4PM.
The Hilton Beach over at Sunset Key is not such a biry nice. We enjoyed more the State Park Beach at Ft. Taylor (and the Fort itself was fun). We arranged with the Hilton to take an evening snorkle sail out to a reef, and then come back during sunset -- wonderful, wonderful wonderful!
Make sure to grab dinner at Blue Heaven, and at Turtle Kraals. Both HIGHLY entertaining and delicious. Don't waste your time at the Key West Botanical Garden, but make sure to take the Audobon House tour and expecially the "Treasure Museum" just across the street from the Hilton. Everynight, at the Hilton pier and the adjacent Mallory Square you'll find a great SUNSET celebration. Lots of food, lots to drink, lots to see, and lots to buy. At Mallory Square, the tradition (and it may in fact be a rule), is that you can only sell what you yourself make. So it's mostly handicrafts, and very reasonably priced. A thoroughly enjoyable place, a terrific hotel, and we're definitely going back!