Granted Capri is overpriced, but at 125euro a night, I expected more from the Mediteraneo. The B&B (I would not call it a hotel) has its charm, but there were some shortcomings. For one, half our room (#7) lay underneath a main pathway for locals. So whether it was mopeds late in the evening, or joggers in the morning, there was considerable noise and pounding overhead at all hours. There is also no view, as the place is nestled into the hillside of Anacapri. Breakfast was functional, though we were served the same fruit, yogurt, and croissants on Sunday as we were on Saturday.
As for the proprietors, they legitimately tried. The guy suggested exactly 1 place to eat, and basically directed us to his friends in Anacapri for souvenirs. The room was kept clean, and they made us fantastic cappucchino in the morning. In addition, the location is good, and apart from the mopeds driving along occassionally, the area is very quiet and off any main street.
In summary, while the Mediteraneo is OK, there are other B&B options available that are better for a lower price. A pool is particularly nice, as is a view of the sea, neither or which we had.