We stayed at Villa Paraiso in Feb 2007 as part of REI Adventures ,Active Nicaragua Tour. This is an excellent tour that I can highly recommend. The tour guide , Gerald, was excellent.
We found the food to be excellent. It's not gourmet but we had fresh fish and other entrees well prepared. There is a pleasant area outside to eat and the magpies are always entertaining.
The hotel is in a really pleasant location along the best beach on the island. Swimming in Lake Nicaragua was very pleasant.
The cabanas generally built in a hillside overlooked the beach and lake are well situated. You have a hammock out front to lie in and enjoy the everpresent breeze.
When you evaluate the rooms, keep in mind that this is rural Nicaragua. You might see a lizard or insect in your room and maybe the shower is tempermental. Villa Paraiso and Ometepe island are really pleasant and relaxing places to hang out for a few days.
We found the staff accomodating and had no problems with our bill. Some of them might be a bit shy. i would love to go back.

Spent ten days in Nicaragua (Ometepe, Granada, Managua and Corn Islands) and this was our least favourite place - mainly because the people (owner and reception staff) weren't very friendly - unlike the rest of the the Nicaraguans we met who made us feel very welcome. When they have more competition on the island they will have to do better. Food was ok, but everything had a nasty stale oily taste which we couldn't stand after three days. Nice situation overlooking the beach, but the room was really basic with none of the nice touches we found in other places. Cabanas seem to vary a lot, so make sure to get a good one with a beach view.

Title: My Little Hell Hole!! AVOID AT ALL COSTS

I was scheduled to stay here for two nights and three days in mid July 2007. I stayed one night and was in horror. I have traveled to Latin America for over 30 years. I have stayed at some dives. This place was the absolute worse. The food was bad--really bad. The service was worse-like none. The rooms, well let's say that you would rather sleep in the middle of a pig pen, because it may actually be cleaner and smell better. Money was stolen and to top it off we had to pay to the rough looking Russian women money to get some money back. The only good thing I can say was that the horse back riding was great although the guide took us where he wanted to go and cut us short by 10 minutes. AVOID THIS PLACE AT ALL COSTS!!! DO NOT GO HERE!! WARNING TO ALL TRAVELERS...AVOID!!!

Great drivers, Jose Maria, Douglas, and Fenor were very nice and personable. More like tour guides. Only Douglass spoke English. Waiters in the restaurant made us feel like were were inconveniencing them, but the food is very good. Rooms are acceptable, desk staff were nice if we were nice to them. Some travelers did not speak Spanish and expected the desk staff to understand their needs. Worth staying at this place on the island if only for the food and drivers.

Make sure to visit the waterfall, Finca Magdelana, local schools (take them school supplies, very poor), and see the monkeys early in the morning. Also, worth a visit to the local natural pools.