Location, location, location. The hotel is right on the plaza in "downtown" Arcata, where you can walk around on 2nd Fridays (with all of the shops open late, serving appetizers and hot cider), walk to several restaurants and several bars. The plaza is cute and hasn't changed much since the 1920s, and now boasts a nice farmer's market on Saturday mornings.
My wife and I stayed in a queen-bed room for $95/night ($75/government rate). The room was clean, with old quaint old hotel amenities like a clawfoot tub (and good water pressure), and the windows open. Old black and white photographs of the town and area from a century ago grace the hallways, adding character. Free wifi is available in the rooms. The nights outside were cool, but the temperature in the room was comfortable.
The downsides: the bed was only moderately comfortable, the room lighting was dim, the bars and plaza attracted drunk HSU students to make noise until midnight and the walls are somewhat thin. A free "continental breakfast" consists of a little bar by the check-in desk with a basket of muffins, bananas & apples, and coffee. If you need things like hair dryers, ironing boards or are a light sleeper, look elsewhere.
In summary, it's got some flaws, but I would recommend it just because of it's great location and it's nice to see a hotel with local character as alternative to the chains. Most other hotels (esp. the chains) are out on the highway, outside of the main town.