I loved the location of this rental in that it is in a fancy neighborhood near a beach, with a playground and a walking path, and the house itself has a trampoline in the yard! Plus, you are at a real house, so one jetlagged afternoon, we borrowed the Harry Potter videos. However, as an American, I felt like I needed a car! The grocery store is a solid 30 minute walk away, and the bus stop is a 15 minute walk; Furthermore, you need to transfer from the bus to the metro to get to the main tourist centers, like Skansen and Grona Lund, so the transit time is about 45 minutes to an hour. It's the suburbia of Stockholm, except with no wi-fi. So, pros and cons to this one!
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With a family of six, we enjoyed renting the house on the hill in Lidingo, just outside of Stockholm. A hotel would have been way too expensive, and fortunately this house was fair priced and quite cozy! The house was a great choice because we could grocery shop and save money by eating meals at home. We were worried about commuting to the city from the house, but the trains in Stockholm are frequent and easy to catch. The house is one block from the train station (but you don't hear trains when you sleep--I promise!) and it's just two trains to get to central station.
I recommend getting the Stockholm card so you can have unlimited transportation on trains, boats and busses as well as all 80+ museums in Stockholm. It pays for itself after the first day!
Also be sure to visit Gamla Stan for a trip to the 17th century :)