Luang Prabang is a really beautiful place. We stayed in the Malida for two nights as part of a G Adventures tour and I would say that this is a perfectly good place to spend your nights.
By Western standards it is quite basic but at the same time, it was very comfortable, secure and impeccably clean.
The rooms and bathrooms are a little on the small side but in fairness, you don't go to Luang Prabang to sit in your room! if you did then there would be something wrong with you!
The a/c is good, there is free internet and wifi and a decent breakfast.
The main sights such as the National Museum and the Wat Pu Si (an absolute must to go to and sit and watch the sunset) are about ten minutes leisurely stroll, as is the main market.
The Malida is in a quiet, sleepy part of town, very quiet and restful and well worth your time and money.
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