Tony Resort is situated at Patong Beach on Phuket Island. The hotel is set back from the beach but is only a short walk away along Soi Kepsup.
Also it is a 10 minute walk from Soi Bangla which has a large congregation of nightlife and bars.
I found the hotel to be good quality, the rooms were quite nice. The pool was good but the location is not the greatest, but is good if you want to be close to Bangla and you're not worried about not being on the beach.

The price I paid for this hotel was about 2000 baht per night at the end of peak season - which seems to get longer every year. I notice on their website that the price for the same room now - Dec 2009 is 3000 baht and 2500 baht in low season so I think you might find some room to negotiate.
I think you could get a better deal by buying a package deal from an airline. The price of hotels in Thailand with the high rate exchange rate to baht is making Thailand quite expensive for a second world country.
Nice good quality hotel with a very good pool. Shop around before you go and I think you will find better value though paying for a package in your own currency.