I am a rabid fan of the Cape Grace Hotel in CPT (a short walk from the Victoria & Alfred waterfront). I was there in Oct 1998 and I never wanted to leave. The service is impeccable without being at all formal, and the rooms are very well decorated and roomy. Friends were staying at the Victoria & Alfred Hotel at the same time, and it seemed like a total dump compared to the Cape Grace. I'm not fond of the Table Mountain Hotel, either, as the staff seems stiff and uninterested in you if you are not a celebrity. There is also a wonderful (and relatively inexpensive) restaurant at the Cape Grace, in which I had a meal to rival many in Paris, New York, and yes, San Francisco.
I'm more than ready to go back. Have a great time.