We stayed here for two days, three nights, on the grounds of the Alhambra and a ten minute walk to the Plaza Nueva in Granada. Access to both the Alhambra and to the old city is excellent. And note, it is as important and in its own way rewarding to visit the old city and to climb to the Mirador as it is to see the Alhambra.
The price is high and the rooms are very good - not outstanding (we've had better rooms at the paradors in Ronda and Hondurrabia). The restaurant is of high quality by any standard and excellent by parador standards. If location is everything for the tourist spending a few days in Granada, then this is the place I'd recommend. If the visit is to be a longer one, there are good hotels and better prices in town.