3.5 stars--Cool Corner room more like Cool Closet
First, a general comment about Starwood: (not really reflective of this hotel)
I have gold status and like the spg program, however, its pretty confusing to navigate. Any time I call the hotel, call starwood, or do an online chat with starwood, I am given different information, usually conflicting, with varying degrees of friendliness. I think the people that work in these different areas are confused, and it is obvious. Part of the problem is that when you try and book a room through the W website, starwood website, or starwood ap (calling the hotel directly seems to get a less desired rate) there are different packages available. So my overall advice with Starwood is shop around their different various websites and don't take one person's word for it when they tell you something. I was told by multiple people my room was prepaid and could not be changed, even though my confirmation said otherwise. In the end, I had no problem making those changes, but i wish i didn't have to go through the hassle. 
Some of this is relevant to my stay at the W, because the front desk person did not understand the package that was booked, and then when I got my invoice, I had to call and go back to the front desk to get the charges taken off. This is really a minor inconvenience but it goes back to my earlier point of general ignorance so I am sure it happens on a systematic basis. That said, they fixed my bill, but why deal with this at a luxury hotel brand? A wise man once said " details, gentlemen" they really do matter.
Ok, on to the hotel, I felt that I got good value, package included a couple drinks and an Amex gift card. The room was REALLY small....I am local, so I get the whole NY real estate thing, but cool corner is advertised as >300 sq ft. My first NYC apartment was 600 square feet, so I'm calling BS on that...other than that, the bed was super comfortable, the shower was great, nice bathrobes, and it was a nice room. Living room bartender Trevor was friendly as all staff we encountered were. The location is a little weird, I mean, its FiDi, so there is easy access to Tribeca/SoHo and battery park. I noticed alot of out of towners love it there because of the whole world trade center thing which seems really bizarre. I didn't want to stay in midtown, and because of the close proximity to downtown neighborhoods, and the room rate, can't really complain about the location.
I was there for one night with my wife as a night away from our daughter for my birthday, so the size of the room was pretty inconsequential. I am not sure how expensive the room would have to get in order to be large enough to accommodate families, although I always find it strange when families stay at W's--they are not really geared towards families (i know every W hotel manager would probably dispute that though)
It has an ok gym too, workable to get a little done while you are there, but it is more of an afterthought.
Overall, be aware of the location and if its what you want. The rooms are great, but very small.
Friendly and professional staff. Very reasonable prices for NYC (even considering the room size) If you have business in FiDi, its probably a good place to stay, although might be worth checking out the prices at the Ritz too. I would stay again with my wife, but if I were to come back with kids, I think i would want to stay more uptown.