I'm taking a package deal vacation and the only choice of hotels I have is Radisson Key West, Sheraton Suites, and Grand Key. The Grand is definitely out. I know the other 2 aren't in the middle of the "action" but I can't determine which is better. I know Sheraton offers free shuttle to Old Town but not sure about Radisson. Please help.

Of your choices, the Sheraton Suites are best. In fact, they're FAR better than the other two.

Ditto with Susan.

Go with Sheraton Suites.

I've stayed at the Sheraton last April. I was very happy with their service and room.

Here is what I posted about the Sheraton Suites on another site...

We stayed at the sheraton suites for 5 nights in May. We got a King suite, with a jacuzzi tub, and tons of space. 2 TV's, a table, and pullout couch. The bathroom was huge! the toilet was had a door to seperate it from the rest of the bathroom. The pool was wonderful, with a waterfall and bar service. I did not eat at the restaurant or pool bar because it was priced about the same as nicer restaurants downtown, where we opted to eat instead. The hotel is directly across from Smathers beach and had a shuttle that takes you downtown on the hour. (runs 10am to 11:20 pm). The hotel is NOT a walkable distance from Duval St, but is a great alternative. Very clean and pretty.

I might play devils advocate a little here so bare with me. I assume the package deal for all 3 hotels is the same price. They are all very different from each other.
The Grand Key (soon to become a Double Tree) is the newest of the 3. It is nice but the location is horrible. You are VERY close to the airport. It is a hotel that seems to cater to large groups for meetings and conventions as there is a lot of meeting room space. The rooms have every type of aminitie you could need and they do have a restaurant on properity but it is not good. They do have a shuttle but I am not sure what the cost is if any.
The Sheraton Suites is

LOL! I hit the post reply button by accident.
Anyway The Sheraton is an all suites property. It is very nice but the location is also not great. It is near the airport (on the other side from Grand Key) and not near anything else but the beaches. They have a restaurant on site but it is your typical hotel type food. They have a free shuttle but you might want to check what the hours are.
The Radisson is a tad closer to downtown but an older property. They also have a nice pool area. The rooms are O.K. They also have a 24 hour restaurant on site. Yes, it is a Dennys but at 4am who cares how it taste. They don't have a free shuttle but they are on the Bone Island Shuttle route which I think is about $7 a day per person. But I know some packages include a pass so you might want to check that package out.
The last thing I would add is I would also compare what type of room and the location of it in the hotel with the 3 you are looking at. I hope this helps.

The 3 of them aren't great choices but if they were your only choices I would choose Grand Key. They are doing some great deals and might be a little undervalued with your package.

If you want to keep looking consider a B&B. Most are very close to everything.