if u go there for more than 5 days, will suggest to stay in different beach or even other small islands nearby like PP island (beatiful place)
won't suggest to stay in Patong for a relax trip, kuta or karon beach nearby is a good choice,
I stayed in the hotel in Karon: Thavorn Palm Beach Resort which is quite nice, big hotel with nice garden and good breakfast, located next to the beach. i'll definitely recommand this hotel if the price is still reasonable (my time is 70+ singapore dollars, end April 2008).
however, u may want to check online booking websites for better deals, below are 2 good ones.
can compare the price and refer to the review as well.
