Hi Alan,

We were after exactly the same remit and following much research decided on the Santa Elulia area, right next to both the Santa Elulia beach and the Oura beach, 10 min walk to the strip or 20 min to old town. We have rented a private apartment but you might want to look at these which are in the same area:

Santa Elulia Beach Club
Forte do Vale
Luna Forte Do Oura
Carruna Apartments
Auramar Hotel & apartments
Tropical Sol Hotel

Hope that helps

Clup Praia D'Oura is right on the beach and only a few mins from the Strip (up a steep hill).

Lummie

20 minute walk Sta Eulalia to the old town? Power walking!

It's just over 3.25km/2 miles and a couple of fairly steep hills involved. The strip (bottom end) is about 2/3rds of a mile.

Comments on that list if I may:

Santa Eulalia Beach Club : 1/4 mile walk from the beach down (and back up) a steep hill.
Forte do Vale :new hotel a mile or so from the old town, 400 yards from Strip but further away from the beach.
Luna Forte Do Oura : about 1/4 mile from Oura beach, 1 mile and a half or thereabouts from old town.
Carruna Apartments - don't know these.
Auramar Hotel & apartments : just over mile by road from the old town and right above the beach. If you go down the steps to the beach and walk along the beach to old town it's a little less than a mile and much more pleasant. Not possible if the tide is very high.
Tropical Sol Hotel : close to the strip but nearly a mile from a beach and a bit further from old town.

Quinta Pedra Dos Bicos---

right on the beach (albeit down LOADS of steps)

great restaurants and some good bars in the immediate vicinity,

taxi rank outside to take you to the Old Town (approx €5)

or a bus stop on opposite side of road
(air conditioned bus takes you into the Old Town in 5 - 10mins for €1.10 mins)

10 mins stroll to the bottom (beach) end of the Strip.

Ideal!

I agree with Milly Molly on suggestion of "quinta pedra dos bicos" great area, near the beach, great restaurants and bars and not too noisy but near the nightlife of the strip if you want it.. Also have a look at http://www.clubepraiadaoura.com they have a few different accommodations within their website that are in the same area..

Club Praia Da Oura is our favourite. Spotlessly clean, fantastic position right on the wonderful beach (no steps) and to get back on to the road, you can use their lift! We have visited different times of the year and I would recommend it to everyone.
If you do decide on it, please book a 1 bedroom apartment not a studio, it really is worth the extra for the convenience of not having to pull out a sofa bed and the room looking cluttered. Any queries, I would be happy to help!

To be within walking distance of both Old Town and Strip, look at The Paraiso, Alagoa Mar and Brisa Sol hotels, IMHO.

Alan
Personally we liked the location of the Paraiso Albufeira. My husband and I are in our 60s but found no problem in walking into the old town or to the Strip. The other hotels mentioned by Algarveaddick are in a good location too with the Modelo supermarket and Pingo Doce right on the doorstep. Taxi stance nearby and mini train also stops nearby. Lets say these hotels are not on the beach but involve just a short walk. The Paraiso does run a courtesy bus that takes you into the old town and to the beach. Sure the other hotels will also run courtesy buses.

Good luck with your choice!