Myself and my boyfriend got back from our first holiday together at CPH yesterday and are full of nothing but praise for the place.
As others have said it is a good idea to get a car - although we didn't bother. It took us a week to peel ourselves off the sunbeds - Kef has that affect on most people we found. We took a couple of days out to explore but used public transport and found it very efficient and also cheaper than the car hire, as mentioned before the Lixouri-Argostoli ferry was excellent at e1.20 with breath taking scenery.
For a day out I would highly reccomend Captain Maccies Glass Bottom Boat - we booked it through our Thompsons Rep Jeni (who was amazing I might add) although all the tour operators on the island use it from what I can gather.
What fun we had, even in the rain (which we had for the last 3 days of our holiday) playing volley ball in the sea and getting covered in clay. And although the food at Ceph Palace was brilliant we ate better on the boat trip than we did all fortnight. The best thing was Captain Maccie finds Dolphins and they come and play with the boat, made the holiday for me.
The evenings entertainment at CPH was a little too 1950's Butlins for our taste but after a few cocktails from the ever attentive Dina and Terry, it can turn into the funniest thing that you have ever seen. Although towards the end of the hol I got a bit frustrated and as a singer myself I took over one night and did a bit myself. But the atmosphere is so relaxed this was not a problem.
The room was 100% clean with a very nice bathroom (one of the most important aspects of a room for me). The pool was visably cleaned on a regular basis as is the beach area, which you notice if you take a walk a little further to a not so looked after area.
On average a beautiful island and top notch hotel - there are not many places I would return to in favour of exploring a new corner of the world but Kefalonia and the Palace is one of them.