This is an old thread and there are a lot more options on the LES now.

In addition to The Hotel on Rivington (which I would definitely NOT call a luxury hotel--it's a modern boutique hotel), there is the new Thompson LES around the corner (another modern boutique place), and the more retro-boutique/B&B-like Blue Moon Hotel, which is probably the "nicest" (but least trendy) in the immediate hood.

A little further uptown there are also the Bowery Hotel and the Cooper Square Hotel, both modern trendy places.