I went to Quito on business two months ago and loved it.
I stayed at the Sheraton, not luxury but really nice.
The best deal I found is taxis. You can hire hotel taxis for about $8/hr.
I went to Mitad del Mundo, or the Equator. There they have nice arts and crafts shops, traditional dining and monuments, highly recommended, maybe 15 miles north of the city?
Don't try to do too much right when you get there as the altitude hit me right as I stepped off of the plane. Lifting suitcases, climbing stairs, trying to beat the plane crowd to immigration takes a lot out of you.
Check tripadvisor.com for hotel info.
Have fun.
Oh yeah, don't be fooled by the location Quito is on the cool side due to the elevation.