Pros: Residential feel, quiet, close enough to downtown to be a good jumping off point, great views.
Cons: More residential, steep climbs up/down hill if you're walking, hotels can be expensive.
Hotels to consider:
The Ritz-Carlton - name pretty much tells you what you're in for. Great spa. Highly recommend the Dining Room even if you choose not to stay there. The tasting menu is a must for any foodie.
The Fairmont - An original San Francisco landmark! Beautiful common areas, nice rooms, great views from certain rooms. Cable car stop nearby.The Stanford Court - Likely the most "budget" friendly of the Nob Hill hotels. Older. Could likely use a renovation in the rooms, but perfectly acceptable if you get a good deal. Cable car out front.
The Mark Hopkins - Top of the Mark is located here and a great place for drinks even if you choose not to stay here.
The Huntington Hotel -Home of the Nob Hill Spa, which I highly recommend. One of the "big four" hotels.