The Fraundorfer is a great place to soak in the spirit of Bavaria! It has a B&B feel in the main building (only eight rooms and a large common area), but there's a more private building in the back of the property called Gasthous Barbara. I stayed on the third floor, in a comfortable room with incredible views of the historic district of Partenkirchen and the Alps in the background. Many of the sites and hikes are within walking distance, and for activities further abroad, mass transit is just a few blocks away.
You'll find the Fraundorfer family to be genuine, warm, and comfortable English speakers (particularly Barbara). Don't miss the great (and free) breakfast and Bavarian accordion/yodeling in the evening---a bit over the top maybe, but its all part of the fun!
Views, hospitality, and accessibility to attractions are all uber-pluses...