Just returned from our trip to Marrakech. We ended up staying at the Riad Farnatchi based on recommendations here. It is a fantastic property in the heart of the Medina. Room 5 was a good size with our own private balcony. Our room took up 3 faces of the courtyard and enjoyed a nice break from the hustle and bustle of the old town. The service was 5 star. I would definitely recommend this place.

On a side note, we were there during the Marrakech Film Festival. In speaking with some drivers, we found that most of the celebrities including Johnny Depp stayed at the La Mamounia. It is a much larger complex than the Farnatchi and is likely a different experience altogether. (Farnatchi has 9 suites.) We weren't dressed properly to get into the Mamounia for drinks but it's that kind of property.