Mabul Water Bungalows
MWB was fantastic overall and a highly recommended place. Starting with the staff that was always willing to help, very friendly and knowledgeable about the area, the marine life, transportation, etc. The food was good, served on buffet style for breakfast, lunch and dinner, and with a good mix of Western and local Malaysian food.
Diving schedules were posted each night and the dive masters were very helpful and professional. Diving in Mabul was good if you are into muck diving. Sipadan is obviously the star diving place in the area. There are restrictions on permits but the staff was very helpful on explaining and finding permits whenever available - I was lucky enough to make it 3 times to Sipadan in a 6 night stay (typically MWB staff says that only 1 Sipadan dive is guaranteed with a 6 nights stay). In Sipadan Barracuda point was really fantastic, great visibility, lots of marine life (sharks, barracudas, turtles).
Finally, accommodations are very comfortable. A bungalow that comfortably fits 2 people with a terrace overlooking the water. There is a small beach at the back of the resort that you can easily walk there or use one of the many bikes that are available in the hotel. Be advised that Mabul island is remote and far from the closest big town. Getting there takes a while (bus ride from the airport, boat ride to the island) but it was well worth it.