I have stayed at Los Lagos and San Bosco Inn...
Los Lagos (not recommended):
Pros: has an spectacular view of the volcano, and nice hot springs.
Cons: is a bit dated, the breakfast is subpar, expensive.
San Bosco Inn (recommended) Hotel San Bosco Inn Home:
Pros: price (bargain for what you get, from $40/night, double room), location (in downtown La Fortuna, close to all services), includes very good breakfast.
Cons: there are no hot springs in the hotel, BUT the room INCLUDES entrance to their lodge (
Volcano Lodge Arenal Costa Rica La Fortuna Arenal Hot Springs, Costa Rica Hotels) which is about 2 miles away, you must drive or take a cab to get there (not sure if they offer shuttle), and there are hot springs, restaurant, etc.