If you don't want to throw down the cash for the Fairmont, the Rimrock is a close second in Banff for a top-rated hotel (stay here and still have drinks/snacks on the huge deck with the amazing view at the Fairmont, though!)
Location - you probably need a car if you are staying here. We loved that it was a 5 minute drive uphill out of town, as you felt up in the mountains and away from the touristy center of town. It is also an 80 minute drive from Calgary. Other location highlights - the hotel is right across the street from the Hot Springs and very close to the Banff gondola which is a must on a nice day for great views.
Hotel -The hotel is a lot more modern than the Fairmont, and very lodge-feeling. We enjoyed the common areas, and especially the bars and the small deck overlooking the mountain side (only 3 tables, though). We only ate dinner in the lounge once, but it was quite good and moderately priced. The rooms were somewhat plain, but were very clean and included high quality sheets, pillows, and linens. Most rooms felt like a corner room with windows on both sides that come to a point with beautiful views. Staff were friendly and accommodating at all times, and were always helpful with directions and tips.
$16 daily parking
Deck for drinks was only 3 tables - always a wait to sit outside
Rooms somewhat plain - and our bathroom seemed to always have someone else's hair on the floor which was not ideal
Restaurants we liked: Grizzly House for fondue, Bear Street Tavern for pizza and drinks, and Phil's for breakfast/brunch.
Sites we liked around Banff: Minnewanka boat cruise, Banff gondola/Sulphur Mountain, Johnston Canyon, Bow Falls, and Vermillion Lakes. We did all that in a day. We spent a second day around Lake Louise/Moraine, as well as Yoho National Park sites.