We are looking for a nice hotel within walking distance of Paddington station, or short taxi ride.

Budget? There is a nice hotel right at the station but it is fairly expensive. Most other places in the neighborhood are more down-market/cheaper (for a reason).

Is there a specific reason you want to stay near Paddington? Is this a sightseeing trip? Paddington may be pretty inconvenient for your needs.

We have an overnight stay on our way to Italy, was thinking that station closest to Heathrow. Definitely open to other idea. We arrive 11 am one day and leave same time next day.
Thanks

We stayed at the Hilton, it is right at Paddington Station; which is where we wanted to be on the last night in London, we got a special on the room, but I'm sure there are less expensive hotels around.

Paddington is "convenient" to the Heathrow Express but not to anything else. And the HEX is very expensive. It really isn't necessary to stay there especially since your flight isn't at the crack of dawn. You can stay in any neighborhood along the Piccadilly tube line (South Kensington, Knightsbridge, Mayfair, Green Park, Covent Garden, Bloomsbury etc) and be on the direct line to LHR.

Or if you have too much luggage and don't want to use the tube, you can stay absolutely anywhere and use a pre-booked car service. Do you want to see/do anything or just rest/relax before flying out?

I personally wouldn't stay at Paddington unless I had business in the area.

But again - what is your budget?

"we" would pay more for 2 HEX tickets than you would pay for a car service.

Would like to be in decent area with restaurants, etc. My husband has never been, I have. Don't want to cram too much in, but would like him to get a glimpse of London. Budget for hotel around 250 US.
Thanks.

Lots of nice places will fit w/i your budget.

Check out Millennium Baileys - it is right at the Glouscester Rd tube station and depending on your exact date should be under $250/£160-ish

Do you have hotel points -- Marriott, Hilton, whatever?

I choose Paddington area myself if using LHR -- walkable to Hyde Park and across to Knightsbridge - LOADS of hotels at all prices - just get some idea via Hotels.com.

I used to do it a lot and used the Quality Hotel round the corner.