I love Coconut Bay and Bay Harbor Lodge!!!!!!! (they are 'sister' resorts - they're owned by the same lady and on the same grounds) It is the best hotel in Key Largo!!!!
We usually stay in a room that has two queen beds and a pull out single bed with a full kitchen (which I think is important, because the good places to eat in Key Largo are very few and far between) for about $125/night in August and we bring our two small-ish dogs for an additional $15/night. It is clean clean clean! And updated! Plenty of clean, bleach-smelling towels, and dishes you are not scared to eat off of! Just remember to bring things like paper towels. And any room you get is steps to their beautiful private beach with tiki hut and grills! We see manatees off their docks every time we go and we use the free kayaks to get an up close look at these gentle giants. There is a 'grass bed' off the beach that you can wade in that has tons of critters (small fish, harmless nickel-sized jellyfish, hermit and horsheshoe crabs) and you can swim and snorkel right off the dock!
Last trip, in August of 2006, we brought my in-laws and my family, and my 15 year old brother did not watch TV or play a computer game once in 3 days!! We went snorkeling off a charter boat, and then he kept himself busy with hand feeding the squirrels, swimming off the dock, and kayaking. His only complaint was that we had to leave so soon!
Great hotel, quaint, beautiful ambience, helpful staff!
Can't wait to go back for the fourth time in April 2007!!!!!

Our family had a great vacation at the Coconut Bay. We moved into a larger unit when we arrived, and the extra bit of money was well worth it. From our kitchen/living room area, we looked out beyond the porch to the beautiful palm-laden grassy area and beyond, the Gulf. Everything was simple, very clean, and well-cared for. The staff, from the cleaning folks to the front desk folks to the gardeners, were friendly and very helpful. We took out kayaks each morning (complimentary) and the paddleboat later in the evening, to watch the sun set. It was a bit of old Florida...brought back memories of my childhood in 1960s Miami. If you're looking for upscale, with lots of high tech conveniences, you might not want to stay here (though the kitchen had obviously been recently redone and was exceptionally clean and modern). But if you want a lovely, affordable place, out of the hubhub...you couldn't do better.