If you need to find somewhere to stay while you visit Key West, then you should check out this really amazing website. It has some really cool Key West beach rentals with some decent prices, too.
I have gone to key west about 10 times and stayed many places. The place that I liked the best was Ocean Key Resort - it is pricey but so worth it. Nice pool area overlooking the water with tiki bar. The Galleon is also a nice place but not as upscale as Ocean Key Resort.
I spend some time in Key West every year myself, and my favorite place to stay is the Eden House Hotel. They have converted a few of the conch houses on the property into suites. Get the top floor if you can. It will be much less expensive than renting a whole house, and it's got a great pool area as well.
BeachListings.com is also looking to expand into this area and list some rentals. It's a beach rental site that offers three times the pictures for the same price, and is currently giving a buy one year, get a second free.