We found this hotel in 1988 - it was in the Michelin Red Guide - and have stayed there 5 or 6 times since. The core of the building was the hunting lodge for the local Prince-Bishops. Klaus & Kate Lieb operate the small, three-storey hotel & restaurant (with outdoor cafe in good weather). The restaurant serves German & Thai dishes (Kate is Thai), and is decorated in appropriate hunting-lodge style.
Many of the rooms are antiquated, but this is changing: when we were there last (Dec 2011), renovations were under way for 6 or 8 of the rooms. Our traveling companions had a lovely, large room with a large bath; we opted for a less-expensive room, with toilet & shower down the hall.
Right beside the river, it is a quiet location. A 30-minute walk, a lot of it through a wooded park area, gets you to the center of Bamberg, and there is a bus stop right out the front door. Sufficient off-street parking. (Credit cards are not accepted.)