This is a really nice hotel. Its romantic and clean. It's not 500 metres from town though, more like 1500. It's a 15 minute walk to the town square. The pool is really nice and there are plenty of deckchairs. The a/c in our room didn't work properly. When we turned it on the water dripped off the walls and flooded the floor. We were shocked by it all but everything else was ok. They were astounded when we told them what had happened. They check the a/c regularly and our room was just a coincidence. Check your room when you check in.
There are some other nice hotels near the centre like the Nissos Thira hotel. The rooms are nice and it's only a two minute walk into the centre. The price there is pretty much the same.