We stayed in Miami a couple years ago at the Palms' sister hotel (Circa 39), and we had lunch in the Palm's restaurant. We liked it so much, that when we came back to South Beach we decided to stay there.
The location is very good, it's a 15 minute walk from Lincoln Road and 20-25 minutes from the crazy-ness of Ocean Drive. Very peaceful, the beach is nice. Like the hotel very much; my only criticisms were that the bathroom is a little small and the WiFi is terribly flaky. Generally service was excellent - except the receptionist in the spa didn't book my treatment properly, and didn't seem to remember us after we had been in there only hours earlier. Honestly, she seemed a little hungover. The spa is small but quite nice and that staff are otherwise very professional.
However, beware of the construction taking place next door. It's very loud, to the point that you would not want to use the pool or beach areas of the hotel *at all* during the day. We were not told about this during check in. When I went back to ask about it, we were told it was on weekdays only from about 11am - 6pm. Well, in fact, it also was going on for several hours on the Saturday morning. Since we were there over a weekend, we had a day out on the Friday and managed to avoid it. However, having experienced the noise, if we had stayed during the week, I would've cancelled my booking and moved to a different hotel. It really is too much, you would not be able to enjoy the pool or the beach while that is ongoing. So beware.