I stayed there as recently as 05 and it was fine. I stay a group of women who can be "persnickety" and they have had no complaints.

There are no other nice hotels in/around Union Square. I suppose the nicest besides the W is the Giraffe to the east, or the Gansevoort to the west in the meatpacking district (very trendy). I don't know if the Gansevoort has rooms that are large enough, but the teens would certainly get a kick out of that.

The Shelburne Murray Hill is under renovation right now I think. If you're going to use an Affinia hotel and are looking for something nice, unless they can guarantee you a renovated room, I wouldn't chose it. I think the rooms/bed configurations are better at the other Affinias.

While you're looking around, I HOPE you've booked one of the Affinia's that's cancelable so you don't lose out on space.

Well, the Gansevoort isn't exactly near Union Square. I wouldn't even consider it close enough to walk easily, and I consider the Meatpacking District to be fairly inconvenient in terms of nearby sights and transportation. I guess you could walk to the Giraffe (it's on about 30th and Park, right?), and it's certainly in a much better location, with a lot of nearby restaurants.

I would definitely check the rates at the Doubletree Suites Times Square. We stayed there with our two teenagers and it worked out beautifully. It is in a great location--right on Times Square and right beside a subway station so that you can get anywhere in the city very easily.

I have stayed in NYC three times and LOVED this hotel http://www.hotelmetronyc.com/index.asp It has been newly updated and has a roof terrace where you can have drinks and see an amazing view of the Empire State Building. Staff were very friendly. Rooms were impeccable.

We stayed at the Marriott Marquis with DD when she was a teen and had a suite which was great and really loved it.

the gramercy hotel is near union square--21st and Lexington, definately walkable, has suites and recemtly renovated to be "hip."
http://www.gramercyparkhotel.com/index.html