We stayed in Mexican Hat at a place called the San Juan Inn in Sept. 2004. It's a decent place, very reasonable prices. The room was nothing special, but clean and comfortable enough for me. You can see their website at http://www.sanjuaninn.net/index.asp.

It's right along the river and it has a restaurant too. We ate dinner and breakfast there and I think it was pretty good. We were also able to do laundry there.

I don't know that it's the best choice, but we were satisfied.