We loved our stay in Kauai, in unit 244 Islander on the Beach! Don and Christina were very attentive hosts, even considering the distance, and left plenty of information on how to get a hold of their on-island contact.
Islander on the Beach is a great complex. It is very clean, well manicured, and taken care of. Considering how inexpensive it was to stay here, Islander on the Beach is WELL worth your money. It is a beautiful place. Obviously if you paid $300 per night, the room/grounds would be more elaborate, but my husband and I were extremely satisfied with Islander on the Beach.
There definitely was some construction going on right outside our unit, and it didn't look like they are going to be done anytime soon, but we were so busy exploring the island, that whenever we got back to the room after our day's activities, the work day was over! Unit 244 has a great view of the grounds, pool and tiki bar, and the ocean. The unit comes with beach chairs, beach umbrella, towels, and boogie board. The mini-kitchen is well equipped and has everything you need.
As far as Kapa'a and surrounding areas, we thought it was a perfect spot to be on the island, especially for our first time visiting. The Trees Lounge is in the same parking lot, and the Coconut Marketplace is a quaint little shopping mall - although somewhat deserted. The north shore and the south are both about an hour away, and so it's easy to traverse the whole island day by day.