We stayed at the Parador in October. It did have a fabulous location nestled within the Alhambra which I feel was the best in Granada. That being said, while the setting was gorgeous the price and quality of the room did not match up. Our room window had a lovely view of the outdoor dining patio and beyond but it was also a haven for the smoking clientele so we had to keep the window closed most of the time to avoid the cigarette smoke. Once you closed the window, the room was not much different than a standard room at a standard hotel. I went to the desk immediately upon checking in but they would not change our room. At over $650 a night to stay there, the quality and service was not worth the price. We have paid half that to stay in beautiful European castles with much higher quality.
The restaurant however was great. They included a fabulous buffet breakfast with the room cost which was the best we had on our trip to Spain.