As of summer 2008, the hotel's rooms had really fallen into a state of shabbiness - I check out a standard unit in July 2008 and found it stuffy and cheaply furnished. However, management has undertaken a significant renovation, and I've heard reports that linens, TVs, and furniture have been greatly upgraded, and that the hotel is looking better than it has in years as of 2009. Keep in mind that this is still largely a place to lay your head at night, not the sort of resort where you're going to want to lounge about in your room all day. With rates starting around $150/night in July and August and $95 or so during the spring and fall season (on weekdays - rates are always higher here on weekends), the Grove isn't cheap compared with comparable properties in mainland beach towns, but it is reasonably priced by Fire Island standards (and, for that matter, it's in line with what you'd pay at a basic motel out in the Hamptons this).
Arrive with modest expectations, the knowledge that management is working hard to improve some of the Grove Hotel's flaws, and a plan to spend most of your time out and about, and you'll be fine. After all, your room is just off the hotel's large pool and steps from the Ice Palace disco - in other words, this is a swell choice for social butterflies, but might be a little busy if you're seeking a quiet getaway (for that, the Dune Point or Belvedere are better Cherry Grove options.