I stayed at the Terminal Hotel for 3 nights in July. Now mind you, I was backpacking with 2 other friends who I was meeting with in Kenya. I was not traveling with a spouse, I did not have high expecatations of this hotel. It was cheap, in a good location, safe and clean. I never encountered any problems with bugs. Every bed comes with a mosquito net, but I never saw any mosquitos... not to say there weren't any. The rooms were basic, clean and decent. We did have a couple problems with the hot water, but I think we had the same problem in most low budget hotels in Africa.
Overall I would say the Terminal Hotel is perfect if you don't have high expectations. Its perfect for a backpacker, or solo travelers, but I would not recommend it for couples or anyone with "higher" standards. You get what you pay for.