We recently stayed at the Sheraton Waikiki and thought that the room and the location were wonderful.
Our room seemed recently renovated with a flat screen TV and a super comfortable king-size bed. The bathroom had modern fixtures AND a view of the ocean!
The pool area was always clean and you could watch the hula shows in the evening.
The location is great, within walking distance to so many shops and restaurants.
We recommend the snorkeling excursion on the Maita'i catamaran which launches on the beach, right in front of the hotel. We swam with sea turtles and thought this was well worth the money.
If you are going to Waikiki, we wholeheartedly recommend the Waikiki Sheraton.