Here is the deal. Read all the reviews, note that the good ones are from folks who stayed in the larger rooms. I believe that the biggest problem is that the small rooms are REALLY small. The website suggests a bit more elbow room than actually exists.

We stayed in a deluxe suite, with our (older) kids in a triple. The front desk staff was pleasant and helpful. The dining staff may not have been outgoing, but the area was clean, and they accomodated us (arriving late one day, leaving early the next).

I don't know how often the larger balcony is open, but they opened it for the Christmas address (wonderful) and the manager even let us out for a night photo with St Peter's dome in the background while we were dressed after Midnight Mass (nearly three AM).

If the floorplan suits your needs, the staff and location are certainly a plus!

I just returned from a stay at the Residenza Paolo VI, and will never stay anywhere else in Rome. I gather from some of the reviews and photos that I was fortunate to have a deluxe room, which was comfortable, beautiful, quiet, and spotless. It had a marble floor, and a couple of lovely oriental rugs; damask drapes; and simple, but attractive, furniture. There were casement windows -- a delightful contrast to the sealed-in windows in typical modern hotels. I cannot speak for the other rooms in the hotel, but my experience was delightful. The front desk staff was incredibly helpful and charming. I felt safe (the front door is locked in the evening), and the location -- just off one side of Piazza San Pietro -- was incredible. We strolled right from breakfast over to the papal audience in front of St. Peter's. The breakfast room is particularly beautiful, and the buffet breakfast was ample and delicious. Service in the breakfast room was pleasant, but on the relaxed side. Not a big problem, as the more impatient among us could just walk a few feet and pour ourselves a cup of coffee. The view from the terrace is matchless. There are a lot of good restaurants in the area, and a taxi stand right across the square. I recommend the hotel very, very highly, and I am a frequent business traveller with high standards.

Do not be taken in by the great marketing for this hotel, pity it doesnt live up to it.
Overpriced, rooms tiny, air conditioning poor, lift archaic, terrace tiny, appears on photos much better than it actually is.

I suggest you look elsewhere unless you absolutely must be about 500yds from St Peters Square.

Breakfast is OK.
Staff helpfull

I stayed at the Residenza Paolo VI for seven nights and had difficulty sleeping because of the cramped nature of everything in the room. The only plus was the full-size bed. When I was a seminarian in Rome, my room was three times as large! A previous reviewer must have had the same room as I because the photo did justice to the puny nature of the rooms on the second floor of the hotel. OK, two other pluses -- it is right next to the Vatican and the view from the access-limited veranda is very nice. However, you can go no more than three feet once you step outside. The rest of the area is off-limits. I was attending some formal functions at the Vatican that required a tux at night and suits during the day. The wardrobe closet had room for only half my stuff. Imagine if you stayed with a family? Well, you would need more than one room. The gasps of horror by elderly visitors when the staff opened the door to show them their tiny rooms were heard throughout my stay. There was no desk, just a small chair -- good for stacking things on it, that's about it. The room was gloomy as the window was obstructed at the bottom, allowing minimal light in. The bathrooms were small with the tiniest shower imaginable. I often changed the water temperature just because I was trying to wash my arms, legs, or hair and kept bumping into the regulator. Beware of the Web site propaganda and the fact the Residenza is actually listed in a luxury hotel chain guide. As another reviewer pointed out, English-language TV stations are limited to CNN and the Chinese government-run news channel, and the screen was only 13 inches, so it wasn't much fun watching anyway. Breakfast was edible but the poor staff never smiled and were not attentive at all. Every morning I had to go to the counter to ask for a cappucino. All of this "charm" cost me 210 Euros a night. I am supposed to bring a group of alumni here in October. Thank God I stayed here because I immediately called the travel agent and told him to find us another hotel.