Where to stay in Istanbul? Sultanahmet or Beyoglu - Taksim?

Sultanahmet is MUCH more interesting and all the main historical sites are there within walking distance to dozens and dozens of hotels.

I'm seconding Sultanahmet!

You have to pick between access to the major tourist sights, which means Sultanahmet, and food and shopping, which means Taksim wins. If it's a first trip, I'd definitely pick Sultanahmet for the romance, the call to prayer, the rooftop breakfasts over the Bosphorus, the pesky carpet touts: it's the real Istanbul experience. But the food is overpriced and not very good and unless you count carpets and overpriced souvenirs, the shopping isn't a treat there, either. But from Taksim, you can't stroll to the Blue Mosque, Aya Sofia, Topkapi Palace, and the Spice Market. So I would stay in Sultanahmet and eat and shop in Taksim Square! There are a lot of good hotels in Sultanahmet, some of which are converted Ottoman-style houses. We stayed at the Dersaadet the last time we stayed in Sultanahmet. Lovely rooftop space for breakfast and drinks and charming, well appointed rooms. Best of all, it's a bit on the fringes of Sultanahmet, which means not having to beat off carpet touts with a stick just to get out the front door in the morning!

Do you have RS Istanbul guide book yet? If so, good. If not, I suggest you get it as soon as possible as it has a wealth of information to assist you in planning a stay in Istanbul. We used it LOTS in our trip to Istanbul last summer. We also stayed in one of the places he recommends, Hotel Sutton Hill (sp?) which has been recommended by others on this web site. I will try to stay there again if we return to Istanbul.
In RS recommendation for this place, it mentions that you can get a discount if mention RS guide book when making your reservation. We did and when we checked in, they asked to see our guide book which we showed them and we received a discount on an already very reasonable price. Hope this still holds true. We spent a total of 9 days in Istanbul and still did not see everything we wanted to see. Happy travels.

Thanks everyone for your responses. We really appreciate it.
Since it is our first time, we have decided to stay in the old city. Also thank for the advice on getting the Istanbul Eat's. I'm going to look for that today. :) Thanks again for all the advice. Jaks