We stayed at the GUADALUPE HOTEL, which is situated within walking from the Alhambra. You may get a good view of the Sierra Nevada from some of the rooms. there was a winding path behind the hotel leading to a lookout point where I had a nice viewe of the city!!!
Stone's throw from the main pavilion of the entrance to the Alhambra. Fantastic location if you're an independent traveller and visiting Alhambra both in the day and in the evening. No worries about rushing to queue or getting back to your hotel too late.
Not so good point is that you'd be away from the action of the main part of town, on the plus side, you'd be away from the main tourist crowd as well. Some rooms overlook an olive grove and it's mysteriously beautiful in the nights (especially on full moon nights) and early mornings.