Not knowing your budget, I'm suggesting a few top end options:
Danieli and Gritti Palace (both owned by Starwood, you will get/use miles)
Cipriani and Palazzo Vendramin (same owners)
All 4 are truly wonderful but rather expensive. Other more affordable options are:
Ca'Pisani Hotel,
http://www.capisanihotel.it
and two private houses with rooms, very nice:
Locanda La Corte,
http://www.locandalacorte.it
Locanda Martini,
http://www.casamartini.it
The Danieli is definitely a favorite, great location and service. The Palazzo Vendramin is more exclusive, with private apartments and butler service.
Whatever you do avoid the Harry's Bar (frozen Peach Bellini isn't cool) and any restaurant with "menu touristico" on it.
Enjoy!