We had a great stay at the Cottage Ganga Inn. In fact, our first few nights were so good we chose to stay again on our brief return to Delhi later in the trip.
The double room is very comfortable for two people, with a good bed, excellent hot water shower, and good service from the staff. Bedding, small toiletries (soap and shampoo packet), and towels are included. We also asked for an extra sheet (to use as a top sheet) and were given this quickly and at no extra cost. One member of the staff even helped us get random items (at slight up-charge), like beer and a phone charger, which was nice.
We also enjoyed the 3rd floor roof, where we liked to have meals or relax in the evenings. Anyone can use this space, regardless of which floor they are on.
The location is very central to tourist destinations (Chandni Chowk, Connaught Place, Red Fort, and others), and it's incredibly easy to use the nearby metro (Ramakrishna Ashram Marg stop) to get to these and others. Of course there's also no limit of autorickshaws and cabs to be had.
One thing to be aware of is the tourist-trap location. Cottage Ganga is just off the main street of Paharganj, so it's nice and quiet, but the main part is flooded with pushy people trying to sell you something. As soon as you leave the hotel and walk 2 blocks you'll be bombarded. We just learned to keep walking and not reply. If this doesn't bother you, you'll have a great stay.