We stayed at the Capo D'Africa in May 2009. This is not what I would classify as a "luxury" hotel - if you want that kind of catering you have to stay at the Ritz - but it is the next best thing, and a very, very nice hotel that is updated, modern and has a really good staff. It's all a very rare find in Rome, even at the four star level.
The whole hotel looked like it had been fairly recently remodeled; our rooms had modern furniture and fixtures, and the bathrooms were refreshingly updated. The staff was also very nice (Sergio was best!); they made a lot of our reservations for us, provided us with maps and car service, and were just generally on point, which is not something I can say is common for southern Italy. Also, there were two rooftop decks that were a nice touch; we sat on the deck overlooking the Colosseum every morning for breakfast.
My only warning to travelers about this hotel is that it is not in a central location. It is about a 5 minute walk from the Colosseum, on the southern side of the heart of the city. That being said, I am a fairly lazy person and I didn't mind the location. I thought for how nice the hotel was, it was worth it. It's not a very long walk to any of the sites, shopping or restaurants (you could always take the Metro or a bus, both of which can be picked up in front of the Colosseum). I think our longest walk was 40 minutes to the Vatican, which is significantly west of the city. It was about 20 minutes to the Trevi Fountain/Spanish Step area, and we ate dinner there most nights and then strolled back to the hotel. The weather was gorgeous, the Colosseum was lit up, and it was a great walk.