We booked two rooms with friends for a stay in February 2013, taking over a third of the hotel as a result. Both rooms were elegantly appointed suites facing a quiet interior courtyard.
The street on which the hotel is located, Calle Allende. on the north end of town, is slightly upslope from the Zocalo about 6 blocks south. As a result, the hotel is able to offer views of all of Oaxaca from its roof top spa and tables.
There is very minor automobile traffic in front of the hotel, the result of the street being limited to pedestrian access a block to the east, so that through traffic is minimal. A short walk through the pedestrian only street leads you to both the Santa Domingo church/museum (a prime site suggested by most all guide books) and to the Alcala, a pedestrian only street between Santo Domingo and the Zocalo.
There are a dozen memorable restauirants within a couple block walk of the hotel, including Casa Oaxaca, Los Danzantes, and Casa Crespo (Casa Crespo incidentally offers fun market tours and cooking lessons at modest prices).
The English speaking staff, and particular Oscar, at the front desk, regularly went out of their way to make our stay a pleasant one, from the complimentary beverages that were offered whenever we returned to the hotel, to the elegant contintental breakfasts served every morning to the help in booking out of town tours.
We can't imagine staying anywhere else in Oaxaca and look forward to returning to Palacio Borghese soon.