It's as good a location as it gets, IMO. I spent 7 years "living" pretty much on the other side of the Square at the St. Martins Lane. Although there were much better hotel values, I never strayed, mostly because of the location.

As for The Trafalgar, be sure to check out the roof bar. It is tiny compared to places in, say, NYC, but in a city that doesn't have a lot of rooftop bars, it's a great spot for a drink, especially because of its location and view.

Per twa777's earlier comment, Heaven is, indeed, often difficult to find, but is a few mins walk from the hotel. As a landmark, I tell people to use the Sherlock Holmes pub across the street from the Club Quarter's Grand at Trafalgar Square on Northumberland (one block over from The Trafalgar). Duck into the alley and it will bring you into The Arches, which is where the club entrance is.