It depends on what you want. We always stay at Gulfshores, but it is a tad expensive. However, every room faces the beach and it is right on the beach. That is my #1 priority. The have a very nice pool/hot tub and plenty of grills for those who want to cook outdoors. The rooms are not perfect, but they are always clean. Room 201 is pretty nice. It has two bed rooms plus a bonus room with bunk beds. If you have more that 4 people, particularly if you have kids, that room is a nice option.
There are cheaper options on the island. My friend stayed at a new place pretty close to town. I can't recall the name, but it is something like a hotel 6 (it is pink and right off of 359). His rate was about 1/3 of ours, but it isn't on the beach.
[This message has been edited by Bobaloo (edited 7/28/2009 6:35p).]