The Island Shangri-La is one of the few that offer a metropolitan albeit very Chinese experience, as opposed to the bland Ritz, Penninsula, etc.  While these other hotels are located closer to the water, they sit right next to the bus and metro depot, etc.  The Island Shangri-La is tucked back a bit from the fray about 100 yards, which in Hong Kong makes quite a difference.  Also, there are no luxury goods shops in the lobby which makes it a very welcoming experience after getting off that 15 hour flight or returning from the fray of shops on the island.  Consider paying up for a room on the concierge level, so that you can enjoy the harbor views down the hall from your "peak view" room, while sampling chinese delicacies that are ever changing and never run out.

The Island Shangri-La's luxury cultural combination can only be topped by the original Mandarin Oriental.  The Penninsula is indeed elegant, but way overblown unless you truly expect to use their roof helipad; otherwise their lobby is a zoo and filled with noisy shops.  For those who would like to save a few dollars, the JW Marriott is next door and offers a comparable experience, whereas the YMCA Salisbury Hotel is the greatest value in Hong Kong.  Not luxurious but been pumping out high quality service for decades and ideally situated in Kowloon right next to the Peninsula for excellent harbor views.

For a great side excursion, take the number 6 bus to Stanley Market.  It costs practically nothing, and the views from the upstairs of the double decker bus really make you appreciate Hong Kong.  Its more about the ride than the destination.  Take the #6 return bus that goes the alternate route for a different slice of scenery....it will be apparent once there and the hotel concierge will point you in the right direction.