My wife and I stayed at the Refuge Inn in August 2013. This is an independent hotel, not part of a chain. It is well run, and while we were there it was full of families enjoying the local area. We paid a bit extra for the deluxe room, which is described on the website as "spacious," but it was actually a bit small compared to the many other places I've stayed at. The room was clean, but the carpet was a bit tired, and the furnishing were not that special. The inn is on a main street, so it wasn't as quiet as I expected from the website, but on the other hand, it is the second closest lodging to the beach at Chincoteague National Park. It's about 3 miles to the beach, so it's easy to bike or even walk to the beach. There is a small pony farm next to the property, as well as a bike rental business. The parking and internet were free.
There is a continental breakfast in the morning, which was adequate. However, the room where they serve breakfast got crowded in the morning with families. At one time, there was a line in the lobby to get food, and people were eating outside because there were no tables available.