Our top place to stay in La Jolla is:
Hotel Valencia: I love this old hotel from 1926, with views of the water, that is located right in downtown La Jolla. The Lobby is a great place to meet friends for a drink or cup of tea and the restaurant is very good. It reminds me a little of the Four Seasons Biltmore in Santa Barbara, but on a much smaller scale.
The Hotel La Jolla, which is a Kimpton Hotel, has also received good reviews if you want a more contemporary feel.