Anthony B.
Yelp
Disclaimer: Stayed here on work travel, so didn't pay for anything here out of pocket. As you can guess by the $$$, it is pricey, but you're in Stockholm.
Situated next to the larger and better known Grand Hotel, the Lydmar offers a great view of Stockholm's Old Town (Gamla stan), including the royal palace, as well as the river between the islands of Normmalm and Stadsholmen. Though during the winter, a tad chilly just like the rest of Stockholm.
The staff could not have been more hospitable during my stay, and are quite helpful if you need directions, recommendations, a taxi, or anything else. Rooms are a bit small, but comfortable. Each floor has a common area where people sometimes relax in.
The hotel offers free breakfast - I forget until what time. There's a good range of options, including pastries, yogurt (regular or Greek) with toppings, and eggs. It's quite good and a good way to give your wallet a break before heading out to explore the city.
The one thing that was a bit strange was the pictures in the room - maybe I'm just being particular, but found it kinda weird to have pictures of strangers surrounding where I sleep. Might just be a quirk of the hotel to add to the swanky, "hip" vibe. Also, be aware that the main entrance (level with Sodra Blasieholmshamnen) requires stairs to go up to the front desk and elevators, if you're carrying heavy luggage or lots of suitcases.