Stayed in a king corner room, very spacious with king bed and two sofas. Also with a balcony. Rooms are dated but clean, understand refurbishment is planned.
The main things were all good, bed comfortable, aircon works, linen was plentiful and good, shower had enough pressure.
In my experience Mercure hotels run with minimal staff, but found front desk very helpful and available.
Great location in quiet residential street, near Monorail.

The location of this hotel is perfect. Close to the Monorail (100 metres) and the Explorer Bus Route (50 metres). 200 metres to Paddy's Market. 15 mins walk from Central Station and 20 minutes to city centre. Hotels with balconies (or, indeed, a window that opens) are hard to find in Sydney but all rooms here have a large balcony. Built in the 70's the rooms are very large and seem to have the original furnishings...a little worn but very comfortable. Aircon good. Room safe is handy. Be careful leaving luggage as storage area not locked or monitored. Reception service can be off-hand and people hard to understand. Restaurant needs a redecorate and meals are average. We have stayed 3 times and we will be back in October 2005. Recommend if you pay less than than $150. Not worth rack rate of $295.

We stayed there for a week and enjoyed its very convenient location, at a short distance from monorail which takes you downtown with a short ride. Besides, the Chinese district and the entertainment one are close to the hotel which means you can get good and cheap food at any time and buy funny and inexpensive gadgets. Room are nothing fancy but they are ok and the street is very quiet.
Of course staying in Darling Harbour means being closer to nightlife but we had no troubles travelling back to Mercure Ultimo also at night.
I'd definitely stay there again.

First impressions weren't that great.
Upon arrival the young lady at the desk was borderline rude and not quite as inviting as you would expect hotel staff to be. We had an early flight and arrived before check in so asked if we could store our bags and return later on in the afternoon. When we returned to retrieve our bags, one was missing (coincidentally the bag with all our camera equipment).I realised before I had left the storage room that the hotel was not liable for anything that was stolen or damaged. When explaining what had happened to the young guy at the counter he seemed quite unfazed and unapologetic. By the blank reaction that I recieved, it was quite obvious that he wasn't prepared to even pretend to find out if it had "accidently" been removed. I doubt he even said anything to the manager.I thought to myself "okay my fault for leaving it in storage" end of that matter.
So we went back to the counter (minus one bag) and preceeded to check ourselves in. The young guy handed us the key card and promptly disappeard leaving us to wonder what room we were in.
Overall the hotel was resonably comfortable.
The service unfortunately was incredibly bad. Many staff members (apart from one nice lad) were very standoffish and not very helpful, they seemed like they would rather be somewhere else.
A few times I called house keeping and the phone would just ring out. After days out items would be missing from the minibar (we of course got charged for them). When the beds were made, it was as if the blanket was just thrown over.
My stay at this hotel, even though the above happened, would have been enjoyable if the staff were friendly and polite.