We decided to have a little get-away at Rehoboth and decided to stay at this B&B. The price was great. We stayed in the 'Key West Room' and although parts of the room were tight, our sleeping area was perfect and we had our own private shower/bath room. It's about half of a block to the boardwalk and ends at the big arcade and rides area of the boardwalk. Surprisingly, as close as we were to the kiddie adventures, it was quiet in our room at reasonable hours.
As an aside, we saw dolphins every time we went to the beach.
This B&B is perfectly located to not be bothered by the hoopla but close enough to a walk to the beach without any trouble. Breakfast is great, sleeping conditions are perfect, and the guys that run this place are very personable. It's also walking distance (blocks) from the best seafood restaurants in the area.
Bottom line: If you're going to Rehoboth Beach, stay here.