We are planning a trip in July to this area, never have been there but I am very picky when it comes to hotels. I am looking for a nice, upscale hotel to stay in. Any recommendations for what I want in a hotel? Any help would be much appreciated. Thanks!

Very picky meaning...? Give a few more details please. Also, try searching past posts on this topic. Lots of information is out there for you, but if you give a beter idea of your" must haves" or "must nots" you'll be able to get better info.

My husband and I stayed at The Cobblestone Inn (one of the 5 Sisters Inns) right in Carmel. The room had a cozy atmostphere w/ a fireplace and was w/in walking distance of the beach at Carmel. It comes under the heading of a bed and breakfast - but seemed much more. I would recommend it highly!

Troyrobt --
Do a text search for "kbig", who not so long ago was another person looking for a hotel in this area and she/he also claimed to be "picky". You should find some good answers from that thread.
My parents stayed a few years ago at the Tickle Pink Inn in Carmel Highlands, and it was gorgeous: huge room with an outstanding view of the Pacific.
For me, it was too out of the way, especially with a child. Out of the way meaning we have a yearly three day conference in Monterey. Earlier this year, we stayed at the Hotel Pacific, which was perfect for us. Yes, it is nice and upscale. It is an all suite hotel and my only suggestion is to ask for a room away from Pacific Street, as I have heard from other posters there is some noise. The rooms are large and wonderful, with feather bedding. Separate living and dining area; coffee, utensils, plates, wine glasses and a fridge. A t.v. in the bedroom area that turns into the living room. The living room has a fireplace. The bathroom is nicely tiled with two sinks and bath in one room, and wc and shower in a separate closed area of the bathroom. Great little amenities, including a small black & white t.v. in the bathroom. From there, you can walk downtown and to the wharf, which is almost across the street. You can either walk (close to a mile) or drive to Cannery Row and the Aquarium.

For pure luxury try Casa Palermo at The Lodge at Pebble Beach.See link below..
http://www.pebblebeach.com/2e.html