Actually, I was in this hotel in May 2008, but had forgotten to write a review, so I'm doing it now because I think there are so many worthless dumps out there that a pleasant surprise such as Vila Fotini deserves a break.
I stayed there for about 2 weeks in the low season, and I loved it. Firostefani is a short 10-minute walk to Fira, and if you go by the tiny streets facing the caldera, it's a totally enjoyable walk. The hotel is small, simple, but spotlessly clean and very pretty. It had been freshly painted, and I think that like many other hotels in Santorini, they refresh the paint at the beginning of every year's season. The rooms are very bright and airy. I read a previous review by an Italian guest complaining about the noise from the road, but I can say that with the windows closed (there is an A/C, and it was actually cold at night), the noise didn't bother me at all -- and I'm a light sleeper. There are small grocery stores very close, and having a mini-bar allowed me to keep cold snacks and beverages (delicious feta cheese and creamy Greek yogurt, yummm!...) in the room.
Another bonus is the fact that the bus that goes hourly to Oia stops right in front of the hotel, so it's very convenient if you want to go there to appreciate one of the world's most famous sunsets (just make sure you don't miss the last bus back!). I didn't use their partner hotel's pool because it was a bit cold, but in slightly warmer weather it would have been very nice.
The owners are courteous and kind, and they picked me up and took me back to the airport, even though I was the only guest in the van. Although the owner didn't speak much English, her son did so perfectly, and in any case she was always helpful and we could communicate somehow.
The included breakfast was simple (fresh bread, cake, orange juice, jam, butter and coffee), but tasty and filling. The only thing I would improve in this hotel, is that I would prefer real milk with the breakfast instead of artificial coffee creamer, but that's just a small detail. And at 20 euros per night, one cannot complain about such small things.
Another thing I liked was my room's vine-covered small veranda where I could sit in mid-afternoon when the sun outside was too strong to walk about, and peacefully read a book feeling the breeze and looking at the blue sea in the distance (in the direction opposite to the caldera -- lovely sunrise too!)
So all-in-all I highly recommend this place as a very affordable alternative if you want to have a peaceful and relaxed stay in swank Santorini without breaking the bank. It is not the luxury hotel many people associate with the island, but I think the simplicity and spareness makes it more authentically Greek in character. I love its unpretentious low-profile, and I will definitely come back.