At first glance this looks like quite a quirky hotel just outside the CBD but in a good location on the quayside. The building itself is a converted warehouse come passenger terminal, and much of the inside has been left 'as was'. This has left an enormous area inside which can seem quite gloomy at night, but is fascinating during the day, whilst the rooms extend up four floors or so on both sides, thus guaranteeing waterside views - on 'our' side a magnificent one over the yacht marina to the Domain and botanical gardens, and on up to the city.
We arrived early after an overnight flight from Hong Kong, and although well before check in time and with our room not ready the staff could not have been more helpful or friendly. We were given a changing room, bags stored and then given advice for exploring the city - having a stop for the city tour right outside made this the obvious starter.
On return we were greeted by name by both the concierge and reception, and shown to a room on the fourth floor with bags already inside. Couldn't fault the room - large, comfortable and a king sized bed, with an excellent bathroom and shower. The only downside was the lack of (free) wifi in the room, although it was available for free for visitors in the bar on the ground floor and at reception! Considering the cost of the rooms this seems extreme miserliness on the part of the hotel management - I might add this was one of only two hotels we stayed in during a six week tour of HK and Australasia that did charge extra, We therefore didn't eat in the hotel, but went over the road to the cafe opposite, where breakfast was cheap and wifi free.
Location-wise it is also very good; apart from our first day we were able to walk everywhere - once through the domain you are into the city proper, with all the attractions Sydney has to offer, and in the other direction up a flight of steps and you are into the Potts Point area and a lot of really good restaurants.
Overall we loved the hotel and would be our first choice to stay when we return to Sydney. It deserves five stars, but the internet policy was for us a major point, and it loses one for that reason.

Visited the Blue Hotel during November 2012 - it was a fascinating building in the renovated pier at Woolloomooloo. Nice atmosophere - very funky. Comfortable room size. We had a double double room - but beware they are really only double beds not queen size. Not comfortable for more than one person per bed. Great location within walking distance to Opera House, The Rocks etc., all connected by a beautiful walk around the Harbour and via the Royal Botanic Gardens.

Went on holidays to stay at the wharf, beautiful and close location to the city and restaurants below the hotel! Though as the building is renovated as loft style accomodation the rooms are noisy from people walking upstairs on the floors, also if the bar is holding functions make sure you get a room away from it all as you will hear music etc - had a great time in Sydney and have now given the Blue hotel a try though next time will stay elsewhere.

We stayed with friends from England showing them the highlights of Sydney. They loved the hotel and location. Our room had a king sized bed , was a great size with the old beams and had a great view over the wharf. It was a good central location, close to the hop on hop off bus, the Botanical Gardens and the Opera House. Staff were very helpful and were happy to arrange tickets to a concert at the Opera House. We will definitely stay again when next in Sydney.