Not great by New York standards
We stayed at W Union Square for two night last week and I've stayed there once before. We were supposed to stay another two nights this week but changed last minute to stay at The James. We were very glad we did.
The location is good, but the rooms and the service cannot compete with other offerings in its price range. The rooms are big, but distinctly lacking in light (the hotel is converted from an old office building). The decor is typical W but a feels tired and a bit dirty. The service is just "ok"; the staff were not especially helpful or courteous. I admit that I'm a tough guest, but I found myself getting ready to argue with staff members more than once in two days. 
We had several specific complaints (though I wouldn't stay at the W again even if we had no specific complaints): no duvet cover on the duvet the first night, no robes in the room, shower drain was blocked; wireless Internet (not free) didn't work with iPad; coffee ordered from room service wasn't enough for two people; hallways were loud; elevators very slow; bell man "passed us off" to the door man after we tipped him (thus encouraging a double tip for what should have been one service).
The manager was extremely helpful when I told her about the problems listed above, but it just wasn't enough to make me want to come back. 
All in all, it's not a very nice hotel. I'm an SPG gold member who usually picks Starwood properties for the points. But from now on, when in New York (unless I'm at the St. Regis) I'll stay elsewhere. If you have 350-500 a night to spend in New York City, I suggest you do the same.