The Matrine Inn is a pretty amazing bed and breakfast -- with an actual breakfast! The rooms are gorgeous and you are right across the street from Monterey Bay and just minutes from downtown.
But this is for a very specific type of traveler, so there are few things missing that can be a little inconvenient for some. There is no television in the room I stayed in, no microwave, no mini-fridge - so if you need these types of amenities, plan ahead.
They do have wifi and it worked fairly well. There are also great public areas where you can play chess, ping pong, or pool, and a gorgeous semi-outdoor space.