We spent three nights at the Wawel Hotel last week. We had a loft style room on the 3rd floor which was very clean, comfortable and spacious. The room also has free WiFi. No toiletries were provided except shampoo (I think!!) in a dispenser in the shower - I didn't find this a problem as I always take my own anyway!
Breakfast was included, and a good selection was provided. You could ask for bacon, omelettes etc if you wished, although we didn't bother.
The hotel is situated in a fantastic location, on a quieter side street off one of the main roads. It is about five minutes walk to the main square, and five minutes to Wawel Castle.
We tried two of the restaurants situated in the same street - Taco Mexicano and Corleone. Both were very good - especially the mexican!
I would recommend this hotel.