I have been going to Pismo my whole life and drove past the Cottage Inn by the Sea many times wondering what it's all about. We were impressed. We were located on the bottom floor (Room 513) with an Ocean view and a door to the back porch with chairs. Here are my thoughts:

Rooms- Having an Ocean view is the way to go. There are two types of ocean view rooms. The rooms upstairs have a better view but no porch/balcony. The rooms downstairs have a porch and a view of the ocean (when we go back, we will make sure to be downstairs again).

Fireplace- Our room had a fireplace which is a must have!

Free Breakfast- The breakfast was really good for a continental. They had waffles, scones, bagels, cereal, oatmeal, and more to eat.

Towels for pool/hot tub/beach- There are white and green towels in your room. The green towels are for your use at either the pool, tub, or beach.

Beds- This is hard to evaluate because everyone has different preferences. We slept decent but I find it hard to get restful sleep when I'm in new places. The sheets we nice and pillows soft.

Internet- We were never able to connect to their free internet. That was ok for the purpose of this trip as we spent most of our time away but this would have been a problem if it were a business trip.

Dogs- Throughout our stay, we noticed most of the people had dogs. I'm not sure if dogs can stay with people in the rooms or if there is a special place for them but this could be an issue for guests. I'm not a dog person my self but this never bothered me (partly because there were not many people staying there during this time of year). However, I could see this really being an issue for many people. I MUST say, our room did not smell like dogs at all. If it did, that would have ruined the trip, but it didn't and we really enjoyed out time.

To sum it up, I would stay here again, especially during this time of year (December).

Do not be taken in by the website photos, this hotel is one of several hotels and restaurants situated along the cliff top and has hotels either side of it. It does have sea views and a narrow frontage which has been made into a garden of sorts. Advertised as 'English', with the fake beams, roof tiles and non-standard rooms and windows, it is less like a normal American hotel. The evening check-in staff were enthusiastic and friendly and parking is right by your door, or outside staircase. Our room was upstairs with a sea view, the angled roof gave it a spacious feel and the fake log gas fire provided instant warmth. Tea as well as coffee making facilities were provided in the room but we wondered if 8 pillows on the bed were really necessary. We slept well in this comfortable room. The bathroom has a sliding door and robes are provided.
Breakfast next morning was a real let-down; the good impression created by the room and check-in staff was completely spoilt by the breakfast and check-out experiences. Although the Virgin brochure decribed it as 'deluxe', breakfast was more like that in a mediocre English cafe and, adding insult to injury, there was a box labelled 'Tips' when the whole thing was self-service. The check-out staff were off-hand and did not even look at us, let alone ask about our stay.

We finished our two week tour of Southern California with 3 nights here having chosen this hotel for the ocean view position. We had an ocean view room which is well worth it but I would have loved the opportunity to sit outside on a balcony (first floor rooms don't have a balcony) enjoying the views. However the seats in the garden area mean you can do this - sitting there enjoying a glass of wine watching the ocean (including dolphins and seals) - lovely and relaxing.
The rooms are very good, clean and well equipped and the staff were very helpful and efficient. Breakfast is a lttle limited in selection but more than adequate and there is free internet access in the breakfast room.
There is a nice pool and hot tub area - but it is not particularly big so I assume it may get busy. It wasn't when we were there and it was a bit a chilly (particularly noticeable having come from Death Valley and 115 degree!!). However the screening round the pool makes it very sheltered. Of course the pool is probably not that important when a 5 minute walk down the stairway leads you to the expanse that is Pismo Beach! Its probably a 20-25 minute walk along the beach to the pier and the centre of town (takes a similar time walking along the main road).
Pismo Beach is a small town and seemed a little 'out of season' but there are some nice restaurants and stunning scenery. The hotel was a great choice for location and an ability to relax. Do splash out on an Ocean View room - its worth it!!

First ever night in the US - easy to check in andpark. Rooms cosy (read very warm) the ceiling fan helps., but I would be concerned staying here in summer with no air con!!
The details of the towels as swans was a lovely touch. The hotel staff were very helpful with giving us directions to local eateries and shopping.
The breakfast was basic but ok (breads, fruits and assortment of spreadable condiments). Only styed here for one night but it started my trip off well!