Just spent 3 nights here. I usually stay at Aria or MO, but it was comped... so why not. Check-in was a breeze. The rooms are similar in style to Venetian, but not really a fan. The bed was extremely creaky (good thing I wasn't banging a showgirl... as I normally am). Small tub. I'm going to assume we were given one of the older rooms since they didn't give us a sunken living room. Looks much nicer on their site. Still.. wasn't bad.
The one big plus for Palazzo is the layout of the resort. Everything is where it should be. Want to go to the fitness center? It's underground (unlike Aria... where you walk through a common area to get to the spa) and there are two gyms - a small one at Palazzo and a bigger one at Venetian... also underground; they're connected). Valet drop-off is on the main level. Valet pick-up is downstairs. It's a short walk to Wynn, Palazzo stores like Barney's, and restaurant row/Grand Canal at Venetian.
It's ok. I'd stay here if the room was free, but I still prefer Aria.