I have stayed at many hotels on the strip, and I think Palazzo is definitely one of the best values for the money. All the rooms are very large and in pretty good shape as it is relatively new. We had 2 suites (they call all the rooms suites), one for us and one for the kids. For an extra $100 night we upgraded one of the suites to double the size so we had a huge master bedroom, bathroom, powder room, and combined living room/dining room area. And there was a small exercise room with an elliptical as well. I also love the location of Palazzo: across the street from Wynn/Encore, Fashion Show Mall, and Treasure Island.
You have a huge number of restaurants you can choose from without ever even going outside. Many of them are on the very $$ side though. There is the Grand Luxe Cafe which is the most reasonable full service restaurant. There are also more fast food like places in the shopping areas of both Palazzo and Venetian. A big plus is the Walgreens inside of the Venetian retail area in case you need cheap water or other snacks or sundries.
We were somewhat disappointed in the pool area and hence minus one star. It is mostly in the shade until noon or so. The "Azure" pool which is in the sun early was completely closed during the weekdays when we were there so that was no help to us. Good drinks service, but no food service so you'll have to get off your butt if you want something to eat. The pool restaurant is a Wolfgang Puck creation (Solare I think?). Very good pizza, but overpriced as you would expect. If you want to walk a little further you can go up to the Burger joint in the Palazzo shops that has burgers, salads, etc to go which is a lot more reasonable.
Overall - Palazzo is a place I would highly recommend.