My husband & I stayed here for a week (16-23rd August 2011) and had a lovely time. Hotel Castelletto are fantastic in that they pick you up from the hotel and give you a lift back, all free.
All the staff were very friendly, breakfast plentiful. The only niggle was that the air con in the whole hotel broke down on the saturday evening and couldn't be fixed until the monday which made sleeping really uncomfortable. They did lend us a fan which helped a little however 'top tip' - soak a towel in cold water and lay it on top of you! This obviously is just one of those things and outside of the hotel's control so I don't really blame them.
Yes, its under the flight path but so is the whole of Cavtat so I wouldn't really worry about that.
And yes, the hill is steep, but again, most of the hotels and apartments are somewhere on this hill so I don't think you can really avoid it.
Cavtat itself is a beautiful place. The sea is amazingly clear and warm. Buy yourself a snorkel and explore the world under the sea, there's so much there!!
The restaurants are ok, some overpriced for reasonable food. The two I would suggest are Poseiden (though not the pasta, the pizzas and burgers are good as is the fish) and LEUT. Both at the town centre end of the harbour, and Poseiden has fab views.

We took a boat to Durbrovnik which was great, we only spent 3 hours there though as it was so hot we just wanted to get back and into the water!

Overall, Cavtat is a great sun destination, perfect for chilling out and relaxing.

We stayed here for one night on our last day in Croatia. The hotel is very nice and has excellent service. We found the staff very accommodating and nice (not to be taken for granted in Croatia where service is good but not excellent).

They provided us with extra beach towels, opened the cafe bar for us and made phone calls to the different tourist attractions.

Cavtat is a beautiful little town with great water sports and a beautiful little town to walk through and have dinner. The only drawback is its vicinity to the airport, with flights in and out of Dubrovnik flying above the town and disturbing the serenity day and night.

Nevertheless, I recommend this hotel. the value is very good compared to the outrageous prices in Dubrovnik or in the hotels of Cavtat.

This hotel is very small - about a dozen rooms. The staff are very friendly and helpful. We had a superior room with balcony, and it was fine, with a lovely view across the bay.
The pool is small, and so may not be ideal for kids, but for dipping in to cool off, it's perfect. The smallness of the hotel and the cosy pool area meant it was easy to strike up conversations with other visitors.
It is up a BIG hill! My husband and I are fairly young, but I needed his help up the hill most days. I did feel it got easier through the week, and maybe helped work off some of the pizzas I had been eating! Planes go over quite often, so if you like silence, this might not be the resort for you - however, we didn't find it bothered us at all.

The hotel is up the hill from the main town. You would not want to walk it more than once or twice a day. Do not plan to walk here with your luggage from the bus station. The hotel itself is nice with clean rooms and a little pool area. They arranged a 5:30am van ride to the airport for us.