My wife and I booked our stay in Quebec through AAA in the US. As the other reviews have mentioned Hotal Alt is about 4-5 miles outside of Old City Quebec. It is, however, well worth staying there when in Quebec. The rooms was very clean and the amenities were comparable to that of a much more expensive hotel. My wife and I both travel regularly for work and consequently stay in some of the nicer hotels in the US; Hotel Alt is, while short on amenities outside the room, a very, very good hotel to which we would gladly return.
What sets Hotel Alt apart, though, is the service. All at the hotel went out of their way to help us plan day trips (Quebec City is very nice and I highly recommend spending some time downtown but the true beauty of Quebec is found in nearby national parks, the St. Lawrence, Ile d'Orleans, etc...) and we had a great overall trip thanks, in large part, to the recommendations and reservations made by the hotel employees. We were accommodated thoroughly during our stay and would return to the Alt without hesitation.
As for the hotel being outside of the more touristy areas, this is true. The older parts of Quebec City are very, very touristy (tour busses, travelling groups, overpriced t-shirts and beer, etc...) but very easy to reach from Alt. There are two busses that will take you to Old City for a few dollars, a taxi is less than $20 and parking is abundently available for $5-$10 a day. While I agree it is often nice to be able to walk home, we felt that the advantages of Hotel Alt fair outweighed the minor inconvenience of hailing a taxi. The price difference between Alt and, say, the Marriott more than makes up for the additional cost of taxies and parking. On the flip side of the location conundrum, being a little bit outside of the city makes it very easy to leave when one tries out the more outdoorsy or spa options Quebec province has to offer.
I am also slightly confused as to reviewers giving a hotel a low rating based on location. If location is important to you, look at a map before you book. The hotel isn't hiding. You can score it on "location" relatively poorly but how this makes the entire hotel experience poor is beyond me.