There are both contemporary and traditional hotels in San Sebastian to choose from. I recommend:
Zinema 7 Hotel, Sagrada Familia 1: I read about it in the NY Times. Formerly the Astoria 7, it is in the Amara Nuevo neighborhood and was about a 15-20 minute walk to the old town and beach area but good for walking off a meal. It is a new, sleek contemporary hotel with the décor featuring a movie theme and actors and directors of films that have been part of the annual San Sebastian film festival since 1953. I enjoyed my contemporary room which had a small terrace and the breakfast buffet in the dining room. There is a parking garage where you can park your car and walk the city. The staff was helpful and great at giving directions and restaurant recommendations. Make sure to ask for their Route of Tapas and Restaurants of the Old Town.
Other good choices include the Hotel Villa Soro, Hotel Maria Cristina and Hotel Londres right on the water.