Hotel Golden Inn is simple great.

I stayed here in september 2002 for a few days in the Happy Life resort. A remote place, about a 20 minutes drive outside Dahab (dirt road - pick up truck driving!) Resort was great, very nice diving and snorkling spots very close to its beach. Nice coral and sealife, compared to places like Hurghada. Nice people as well and the town itself had a hippy-like atmosphere. It was more thai-island like then egyptian/arabic. Having your dinner at the beach with your feet in the sand rules ;-) If you like diving, snorkling and relaxing go here. Buy your bottle of alcohol at the chinese restaurant (the other restaurants don't serve, but don't mind you drinking...)

Bish Bishi Camp Not on the beach but a tiny stroll (50 meters) to the boulevard of Dahab. Nice staff and good, cheap rooms. Very quite!

Iberotel Dahabeya: comfortable and clean rooms, all with tv, aircondition, shover, save,...
the hotel is located right at the beach, about 3 kilometers away from the towncenter, with regualar shuttel bus 3 times a day.
food and drinks are ok, the beach is wonderful, not too crowded

From Fethiye you can rieach it (this minibus is only 3-4
times a day). it takes about 1 hour
and you reach the top of the valley. there's very nice
place there called George House. You can eat breakfast there (very nice, organic food) and go down to the valley later on around noon. it's about 20 minutes to go down, a little bit difficult (especially with big backpack) but still
ok if you are carefull. many people are going up and down
everyday. i'll stay down in the valley just by the sea
until sunday evening and go up again, have dinner and go back to Fethiye to catch my bus back to izmir which is around 23:30 or 24:00.

When you are in Dahab go and visit Bish Bishi a very secluded place. Very simple rooms, cheap and a very good breakfast. Very quiet because it is away from the main street.

bishbish village- 2thumbs up