I remembered when I first stayed here when they first opened in 2008... I was impressed then and I'm still impressed now.
I like the Palazzo. Their rooms are nicely decorated and finished. The king bed was comfortable and big. TVs everywhere, one in front of the bed, one in the sunken living room and one in the bathroom. There's also a tub to take bubble baths! And bathrobes. One downside is they don't have a mini fridge... Only theirs to put their drinks in but no space for any other things... So we used one of their double sink to keep our alcohol in ice. Also they tend to give you free things, we got 2 free coffee from Cafe Presse each day.
I've stayed about almost everywhere on the strip and I would consider Palazzo as one of the top 5. I wish they had a popular club though, Tao and Lavo doesn't count because Tao is in Venetian and Lavo is more of a lounge...