The small, quiet Moon Inn (Lijiang Xinyuege Kezhan) is a rare gem in the center of Lijiang's Old Town: a family-run, 12-room, B&B style (breakfast is not included but is a steal at 10 RMB) Naxi place. Second floor rooms have great views of the ancient city's famous rooftops, as well as Yulong Snow Mountain, and the staff is incredibly friendly and helpful (with some speaking good English, too!).
The hotel is Siheyuan style (traditional single-story houses with rooms around the four sides of a courtyard) with flowers and bamboo. The guestrooms have individual bathrooms, 24-hour hot water, telephone, cable TV, and Internet access. There is no air conditioning in the room.