We stayed at a apparantly little-known hotel in Nagasaki called the Majestic. It's tucked away up a laneway behind the upmarket ANA Hotel and is well worth discovering for yourself. Old world European architecture, a great big room with writing desk and bay window with views over the bay set us in a colonial Nagasaki mood. Great cozy breakfast and dining room downstairs and superb food albeit western style. Incidentally we only stayed here because of a small one-off blog mention of the magic little cozy breakfast room, so what worked for us may encourage others to stay here.
Location just great being close to Glover Garden and walk to shops and tram.
And what a city! That's the prettiest city we'd seen in a few trips to Japan. Go up the ropeway to Mount Inasayama overlooking Nagasaki preferably at night for a fabulous view. See Nagasaki and die happy, we reckon!