I spend 4 nights in Merlin Hotel in Betong end of December 2011. The hotel is old and dark, the room are old but clean, -not excessively clean. The bathroom is acceptable, with hot and cold water.
Location is central and near restaurants and the market. There is a very good thai massage at the first floor; it is a good Thai massage, not prostitution, even if it is the main activity in Betong with loads of Malays, Indians and Chinese men crossing the border.
The other hotels are worse or simply squallid. After having tried a few, I always go back to the Merlin.