Ozstamps,
I spent a month in Baku in 2003.
I was there on a special project, so I was provided an apartment. Thus, I don't have any personal experience with the hotel scene, except that I was in the Radisson and it was quite nice -- GREAT view of the city from the restaurant at the top, the staff seemed helpful and nice, it certainly had an acceptable appearance in the public areas, and the location is outstanding - right in the heart of the city. My impressions of the Absheron is that it is much iffier, but how could it not be when it varies by floor...

Other than the need to agree on the taxi fare before departure, which is quite standard in many places, I never had any problems with corruption or requests for bribes -- no problems with police & since I lived around the corner from the president's residence, believe me, I had plenty of chances -- they were always unfailingly polite & never hit me up for cash. No problems with that at the airport, either. From what I was told by colleagues who went before, it used to be quite bad, but they had cleaned up their act considerably so as to be more acceptable to western business people. I'm very surprised by okko's visa "problem" at immigration -- again, my understanding is/was that such behavior had been eradicated. I was even a bit complicated with some ticket change issues, but still no problems or irregularities.

On another taxi note, I found the city center quite walkable, though I'm fairly fond of walking, so I hardly used taxis. There's also a subway system and a "bus" system - subway was easy, but bus proved a bit tricky (rather loose routes).

I don't have any info about lounges.

I would not recommend Sumgait unless you have some special interest in environmental/industrial disaster zones. It looks like something out of a movie set of post-industrial, scorched earth hell.

I was actually pleasantly surprised by Baku. The city center is quite nice -- lots of green spaces and fountains. The Fountain Square is great for people watching. The promenade along Baku Bay is lovely for strolling (just don't look too closely at the oil slick in the water). The old city is interesting and fun for poking around in (a number of fun architectural surprises if you keep your eyes open). It is a world heritage site and definitely worth spending some quality time in, if you are at all interested in history. Baku was also the jazz center in the USSR and still seems to have a vibrant jazz culture. I hit the jazz festival and was impressed with the quality of performance and the jazz club in the city center had some really nice performers - I think live every night - and good food. I was also impressed by the local cuisine -- interesting fusion reflecting Azerbaijan's location as a crossroads. Good shopping for rugs, if you have any interest in them, but be careful of any claiming to be antiques. There's also a rug museum that is supposed to be quite good, though I didn't make it there.

If you want out-of-town excursions, there is a modestly interesting Zoroastrian "fire temple" not too far from the city. There is evidence of ancient civilization (cave man writing type things) south of the city -- I didn't make it there, so I'm not sure how exciting that is or how far. If you want a totally different look at Azerbaijan and want out of town, you could take a car far to the north up to the mountains -- it is where the locals go to escape the city. I did make it up there -- lush & green & quite different from the rather desert-like surroundings of Baku. The road to the north also takes you past Sumgait, should you want to see that. The road was rather painfully slow 2 years ago -- I doubt it has improved, but it was a very interesting ride for a day trip.

I wouldn't mind going back again for a few days -- it certainly isn't a hole in my view.

I hope this helps. Please let me know if I can provide further insight.