Between this thread and the one on the link provided by SanDiego1K it covers most things.

I have been to Kota Kinabalu a number of times in the last few years and always stay at the Shangri La Tanjung Aru just outside the City and 10 minutes from the airport. There is another Shangri La (Rasa Ria Resort) about 40 minutes away which although it has a better beach I prefer the Tanjung Aru. It has got a decent Horizon Club lounge now that they have extended it.

While KK City itself has improved considerably over the last few years, it still isn't up to much in itself. However, there are alsorts of interesting things to do throughout Sabah, and being 10 minutes from the airport makes this pretty easy.

There are 5 islands just across the bay from the Tanjung Aru as well that are easily accessible by boat from the Hotel. Mt Kinabalu is one of the main attractions as is Sepilok Orang Utan Sanctuary over at Sandakan which is the largest of it's type in the world. Having said that, they also have 4 or 5 Orangs in the reserve attached to the Shangri La Rasa Ria and you can get much closer to them there than at Sepilok, although you don't get to see the fabulous rain forest like you do at Sepilok.

Enjoy Sabah, it's a great place. ^