just stayed at the new Marriott courtyard in downtown Hangzhou last week, (688 rmb a night). check out the Marriott forum/thread for the comments.
It is very near the Hangzhou upscale shopping, & also in china all marriott rewards members, no matter what status, get free internet.

Now, for a modern Hangzhou resort in the country on a lake, try the Aigrette resort, www.aigrettresort.com