My wife and I spent a week in April 2008 at this lovely B&B in downtown Mérida, and we highly recommend it. The proprietors, Ana and Marianna, were friendly and helpful and treated us like friends. The hotel's courtyard is lovingly maintained and became our favorite place to hang out in Mérida during the heat of the afternoons. The location is within easy walking distance of the center of town and close to several excellent restaurants and sights. Ana will happily book a tour for you, call you a taxi, make a restaurant reservation, or whatever you need.
The rooms are quiet and private. All rooms come with ceiling fans as well as air conditioning if you need it (we didn't) and, in addition to the clean and comfortable beds, all the rooms have hammocks (a local specialty), in case you feel like hanging out for a while. Some other commentors have expressed reservations about the bathrooms, which are closed off by tall screens rather than by full walls, but I want to make it clear that the bathrooms are still enclosed fully within the bedrooms—they are not shared with other guests, and we had no problem with them. If privacy is a concern you need only ask your roommate to step out into the courtyard for a few minutes--which is usually not a problem, as the courtyard is lovely and includes a comfortable reading area that is well-lit all night long.
Breakfast is delicious and simple and changes day to day, but always includes fresh fruit, yogurt, rolls or bread of some kind, juice, and coffee. We never ended up dining at Casa Ana but many other guests commented that Ana and Marianna make wonderful dinners as well. The B&B also provides a refrigerator full of ice-cold bottled water and soda (a necessity!) on the honor system, i.e. you pay at the end of your stay for however many bottles you have consumed.
The natural-rock swimming pool in the courtyard is small but perfectly sized for two people at a time, and is a wonderful way to cool off in the heat of the afternoon or in the evening after a day of sightseeing. The B&B will provide you with bathing towels if you require them.
Finally, the rates were extremely reasonable. We saw the hotel rooms of some other travelers we met during our stay, and definitely felt that we were getting a better deal.
To sum up we would happily return to Casa Ana again, and we can heartily recommend it. It's really a gem.