I stayed at Carmen de la Alcubilla del Carol for about 10 days last year and couldn't recommend it highly enough. It's well located for visiting the Alhambra (15 mins walk) and less than 10 mins minutes walk to Plaza Neuva.

I stayed in El Cipres (has its own balcony & view of the Alhambra Palace Hotel & mountains) and another room (La Glicinia, I think).

The property is lovelier than the website depicts and the owner & manager are most charming & helpful. Sitting under the wisteria in the courtyard, looking across Granada to the Sierra Nevada, I felt as if I were staying with friends in their gracious home.

Hit the button too soon.

Parking: There isn't any parking on the premises, but if you ask at the Carmen, they might be able to advise you.

There is a little area along the lane from the Carmen, where you may be able to park. And you may also be able to leave your car in one of the streets near the Alhambra Palace Hotel.
It's about 2 mins walk from the Alhambra Palace Hotel to the Carmen - new pathway built in 2009.

I tend to trust the trip advisor hotel reviews for Spain. It's just not very "spanish" to bother writing a fake review on their own hotel. They barely answer the phone over there. Conversely I would not trust TA hotel reviews for a place like Morroco where it's obvious every Riad owner and their cousin has put up a fake review. On another note, I can't wait to stay at Carmen de la Alcubila some day...I love Granada.

I stayed at the Carmen de la Alcubilla on the Alhambra hill for five days a few weeks ago and also would recommend it highly. Delightful place with helpful owner, comfortable rooms, stunning views, thoughtful (and well-thought-out) amenities. Easy downhill walk into the center of Granada and easy to catch a bus back up the hill. Also easy walk to the Alhambra or frequent bus from nearby Alhambra Palace Hotel.

If you are arriving by car, Manuel the owner will send you an email giving you driving directions as well as instructions for contacting him when you arrive at the specified meeting place. He will greet you there, help you with your luggage, and whisk your car off to his garage or other parking place. You really won't want to be bothered with driving while in Granada.

Please note that Carmen de la Alcubilla is not suitable for anyone with serious mobility or walking problems. Unfortunately, the same can be said for much of the Alhambra and even Granada itself, which is a city best seen on foot.

The Parador is exquisitely situated and surely worth the splurge for those who want to stay within the Alhambra itself and don't mind the cost. If I were one of those, I might spend a night there, then move to the Alhambra Palace Hotel which is very grand, with all that I would want in a luxury hotel, and certainly worth a visit for a morning coffee on the terrace, or a drink at sunset, even if you're not staying there.

Meant to add...

Re: <i>"Given that Carmen de la Alcubilla is not easily accessible by car,"</i>

To clarify, it is accessible, by taxi at least. Manuel arranged for a taxi to pick me up at the gates my last morning and take me to the airport.

i would not spent that much for one night at the Parador, stay in another place and have lunch or dinner at the Parador while visiting the alhambra, true the America hotel is next door, however it is a basic
place and there are fine other hotels a short taxi drive away,also there is a nice bus going up and down the Cuesta.

Hey folks

Thanks for so many great responses and sorry for not replying sooner. I did cancel Pardor and will plan to have dinner there instead, but Carmen was booked for that night so I booked Casa 1800, which seems really good too, and is in downtown. AC Palacio was also good but about 50 euros more. Anyway, here is our itinerary - given all the help I got in this forum, I thought you should know where we are staying - any suggestions of good restaurants or activities near these places is also great:

May 16, 17 - Madrid - The Ritz
May 18-21 - Sevilla, El Rey Moro
May 22-23 - Nerja - Hotel Carabeo
May 24 - Granada - Casa 1800

So much for my initial plan to have only one or maybe two home bases to do the Andulucia! Just didn't work out in practice. We do plan to do day trips to a number of cities, as much as we manage, including of course Cordoba, Ronda, possibly Cadiz. Again, I welcome any suggestions for other places while we are there.

Thanks much for your help - will try to do a mini report at least, when I get back, and will post some photos as well- I may also do facebook checkins (I am Safa Rashtchy at facebook).

Thanks

I definitely think you're up for a journey to remember!