I stayed on two separate occasions in May 2013 in the budget rooms on the first floor of the Alto. The staff were up front about the "compactness" of the rooms, but with the possible exception of the cramped little bathroom, I thought it was pretty reasonable. I could hear the trams rumble by at night, but I didn't mind that either. The rooms were clean, and the beds were soft. Good linen. Inoffensive modern decor. Everything worked. Free WiFi. The TV appeared to have come off the wall mount in my room, but this did not interfere with my viewing.
The staff were extremely obliging, and happy to share local knowledge. There is a fitness centre close by, to which hotel guests can get access, but given that I am not a gym junkie, instead I made my way down to the Yarra for one of my all time favourite Australian morning riverside runs. The hotel is pretty conveniently placed only a few blocks away if this is your thing.
The Alto makes quite a lot of its green credentials, noting that its electricity is entirely generated by windpower. This might be a problem for you if you believe that windmills cause cancer. I don't, and I think it's a fine thing the Alto is doing.
The hotel is down the unfashionable end of Bourke Street, which means you have a 10-15 minute walk to the fun bits, like China Town. I don't have a problem with that - helps me to digest my dumplings on my way back home at night, but if you're particularly lazy or physically challenged, this might be an issue.
All round, the Alto is great for the business traveller looking for a reasonably priced flop'n'drop in town. It's got all the amenities, whilst being slightly more quirky and personable than some of the bigger franchises going around. Recommended.