I haven't actually stayed at the Mwaana, but it's basically home base for muzungus in Iganga. It's the nicest hotel in town (i.e. in the whole district), and it's currently the only Internet cafe from Iganga to Jinja - but new ones are cropping up all the time!
The Mwaana is nice for a Ugandan hotel, and it has a bar/restaurant downstairs that serves drinks and meals. They will always be out of half the menu, but they serve everything from "spaghetti bolognese" (what kind of meat is in there?) to grilled cheese. It's definitely the most expensive food around, but it's worth it, being the only place you can get non-samosa and non-matooke type of fare. "Entrees" are $3-$5.
The Internet cafe is reasonably priced and has about 10 computers, very new (since 2004).
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