I highly recommend B&B on Mountain Lane. I stayed there with my husband and In-laws in October of 2004. The Rundle Suite is two apartments in one, so we had lots of privacy. My husband and I had our own bedroom, kitchenette (which we didn't use), TV and washroom with shower. My inlaws had the larger, adjoining room with the bigger kitchenette, talble, sofa, TV, office space. Their bedroom and bathroom adjoined off of this large living space. The entire suite is housed in the basement walkout area of this modern house with a great mountian view.
We had access to our hosts hot tub on the second level, but we were so busy we didn't try it. The B&B itself was a 5-10 minute walk to downtown Banff, through a nice residential area. Right between downtown and the famous Banff Springs Hotel.
I can't believe the value and total privacy that we enjoyed for a mere $150 per night total. My only concern with posting this review is that the B&B will become so popular that I won't be able to get a reservation in future years.