Before you finally decided on Ko Lanta or Sheraton....

....Go to Railey :-: :-: :-: :-: :-: .
It is about 10 miles from Krabi by boat. Railey is a small peninsula but it has no access by road/overland (high cliffs cut it from the mainland), you need to reach it by boat. Therefore no cars, no polution and much less people.

The Rayavadee is actually in Railey (and NOT in Ao Nang as above FTer posted ) and it sits on the best place of Railey's 3 beaches. There are just 3-4 other small establishments-hotels (which are actually just small cluster of villas/huts - no high buildings at all) facing Railey West beach.
Railey has grown a bit last years but it won't go any further as the landscape won't allow any more houses.

If you saw "The Beach" movie then you can imagine the scenery. The movie was actually filmed not in Rayley (they filmed in Phi Phi island 20 miles away) but location (high cliffs hugging 1/2 mile beaches of white sand, rocks out in the sea, very secluded bay) look exactly like in the movie.

To tell you my story, we discovered Railey 5 years ago. From first moment this is our favourite place in Thailand (if you take beach locations with easy access) and we go there every year.

There are day trippers from Krabi town and nearby Ao Nang but they come and go so the beach is generally peaceful. It could be crowded during day hours of Xmas-NY season but I guess you will be there before.
Rayavadee hotel has restaurants (nice but expensive) and there are 2-3 local restaurants and bars on the beach. Thai food and seafood. Pizzas and hunburgers are also available (but I wont comment on this )

If Rayavadee is too expensive (very much depends on the season - check their website as they can be fully booked), try other "hotels" in Railey West beach (Railey East places are worse and beach is too maggy for swimming). Just select the best villa/hut you could see. It won't be as spectacular villa as Rayavadee but you will have all neccessaties (aircon, hotwater, tv, fridge, daily service etc) fro a fraction of Rayavadee price. www.krabi.com has lots of info.

In summary, I recommend you to try both Ko Lanta (I have never been there but pictures told me not to go) and Railey locations. I think you can hire a speedboat to move between hotels (thus no need to go to Krabi town which is a bit damp).

hope this helps. I only think about Railey and I want to be there now