I absolutely agree--the rooms at the Oberoi (as opposed to the Towers) are nicer, too. Avoid the Taj, which looks nicer on the outside but can be extremely shabby on the inside.

I haven't stayed at any of the uptown hotels (near the airport) but have eaten many meals there. The new Hyatt is extremely popular. Unfortunately, my one experience there was in the Lebanese restaurant there--this advertised belly dancing, but the spectacle was more of a floor show than anything else, and with deafeningly loud music. Deeply disappointing, since I was really just looking for some good food.

Another restaurant to try is the Thai place in the President Hotel. Trishna is also excellent. In general, be ready to eat very late--India can be more extreme than Spain in this regard. I've had dinners that started near midnight.