Seabreeze Hotel Resort

Not located by the beach but rather on the other side of the road, Seabreeze Bungalows is a 5-minute walk to Kai Bae Beach. All rooms have decent wifi and air-conditioning. The Internet works well most of the time, although at times it can get a bit slow. There are 2 rows of rooms near the entrance, one side being the 990-baht small rooms (still fairly big) and the other side are the 1300-baht almost identical but bigger rooms with an additional small sofa. The garden out back is dotted with 1700-baht standalone or duplex bungalows. Seabreeze Hotel Resort can be booked online via agoda, booking.com, or Sawadee.com (seems to offer the cheapest rate).
Because we were a bit tired of atmospheric places with less-than-ideal budget rooms, we opted for the bigger 1300-baht room which doesn't really have much of a view but is very spacious and cool, with a closet, a small small fridge (great to keep drinking water cool), a big flatscreen TV, a DVD player, and lots of outlets. If you look closely, you might see spots on the ceiling (mold?) and dents/scratches on the furniture/walls. Our bathroom door's fixed with duct tape and gets stuck without a forceful push, but the shower is nice and hot.

It is by no means luxurious, but it is naturally lit and very comfortable and feels like a palace compared to budget rooms less than half its price - we had some minor problems with the room, but they were fixed promptly. It's cleaned every day, with fresh towels and 2 small bottles of drinking water. We managed to get a cheaper weekly rate than the quoted price, but found an online booking site with an even lower rate later.

Tip for room selection
The smaller rooms are by the elephant camp and across from the larger rooms. The large rooms on one side face the small rooms but the large rooms on the other side face some beautiful trees. If you can, get a room behind the massage room facing all the greenery. We happened to get the corner room at the end so we can also see into the nice garden where all the bungalows are.
There's an elephant training camp next door that sometimes plays music but we can't really hear it inside the room. There's brief nightly live music but it's not too loud. 7-11 is a few doors down and a 24-hour Tesco supermarket as well as a currency exchange booth are a few minutes down the street. There are many international restaurants around, although they can be a bit expensive. Local dishes are generally 60-150+ baht each, and non Thai food usually cost around 150-250+ baht.

Cheaper places to stay in Koh Chang are Gu Bay at Bailan Bay and Sea Flower Resort at Lonely Beach if you want to be near parties and don't mind loud noise at night.