I stayed at the Taj Mahal Palce in February and was very impressed. The Palace Wing has been restored beautifully, the rooms are much brighter now. Great F&B, great location (you can walk around the area, unlike FS)
I'm usually not a fan of historic hotels, but the Taj Palace has just the right balance between contemporary style and colonial charm. Would definitely stay there again.
This counts for the Palace Wing only, of course - the Tower Wing is still to be avoided...