Vesey says you should visit Colonsay, if you make it there make sure you buy some Colonsay honey: http://www.colonsay.org.uk/honey/honey1.html Best honey in the world! I'm going to buy some again when I'll be there in July.

In regards to hotels outside of Glasgow and Edinburgh I slightly disagree with Vesey. I've found quite a few very nice hotels in a variety of places. They are not necessarily cheap, but still. A few I can think of:

The Port Charlotte Hotel on Islay (where I usually stay when I'm on Islay): http://www.milford.co.uk/go/portcharlotte.html

The Dunain Park Hotel near Inverness: http://www.dunainparkhotel.co.uk/

Kinloch Lodge on Skye: http://www.kinloch-lodge.co.uk/

If you've got a lot of money to spend (or are lucky as I was when I managed to get a room for a huge discount) you can try Rusacks Hotel in St.Andrews (don't seem to have their own website, this is one description I found: http://www.golfing-scotland.com/accommodation/rusacks.asp ). It overlooks the 18th hole at the famous Old Course. Probably only of interest if you're interested in golf though. Or Prince William, who is studying in St Andrews ;-)

But apart from that, a B&B might be just as nice, if not better because you get to know a lot of people.

I remember Kinnaird House in Pitlochry, where all the guests have breakfast together at one huge table (at least when I stayed there): http://www.kinnaird-house.co.uk/products.htm

While the rooms are nothing special the history of the building and the friendliness of the owners of the Empire Travel Lodge make it a great place to stay: http://www.empirelodge.co.uk/

For one of the best views from the guest lounge/ breakfast room I would recommend Kinloch House in Strontian: http://www.ardnamurchan.com/kinloch/ This is in the Ardnamurchan/Sunart area, quite remote and very nice.