The Yeedzin Guest House offers you a chance to stay within a 2 minute walk from the center of the city, including the traffic circle and clocktower plaza. It is a rustic accommodation, wooden floors stretching across 2 floors of rooms (about 20 in total), which have a good look over the city.
The rooms are spacious, with a TV (cable mostly from India), resting chairs and a desk, as well as closet and full bathroom (western toilets and hot water showers). While there is no central heating when I was there, each room had a space heater that was plenty powerful to keep the room decently warm, as well as thick blankets on the beds so I was snug as a bug.
The whole guest house is equipped with wireless, and there are computers on the main floor for those without laptops. The internet isn't blazing fast, but decent enough to keep in touch with friends and family while exploring Bhutan. There is a laundry service which is reasonable and gets it back to you the same day.
Yeedzin also has a restaurant, serving up mostly Bhutanese and Indian dishes, with some western standbys as well. Though I recommend the Bhutanese food, the chiles within will help keep you warm as well! Overall this was a good place to employ as a basecamp for Thimphu, both accommodations and location. I'd go back in a heartbeat.
Basically you don't have a lot of choices as for where to stay in Bhutan, as all is pre-arranged by your agency. However, if you know of the hotels, you can always ask for them.
Yeedzin Guest House is quite worth recommending. The establishment is very pleasant. The rooms are very large.
Unique Quality: Large rooms.
A very good restaurant.
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Address: Thimphu, Bhutan