The Layang Layang Guesthouse is absolutely fantastic. The staff are all friendly, helpful and a pleasure to interact with (especially the young Bangladeshi man with the mustache - I'm sorry I forget your name but it was great to meet you and chat with you!). The room was comfortable and clean with good air con. The communal area bathroom and shower area is picturesque, and the reception area is beautifully done up with all sorts of collected retro items. While it's only a stone's throw (one street parallel) to the famous Jonker Street, it's not caught up in the busyness of Jonker.
My room was directly above reception and at the front of the building. Admittedly, noise did travel from reception, the street, and the room next door - but I think that this is part-and-parcel of staying in a converted shophouse, and the price you pay for being in such an idyllic setting, so I do not see it as a negative on the part of the establishment, but something to perhaps take into account when booking this type of accommodation. If you want a completely soundproof room, perhaps you shouldn't be staying in the old town area at all!
Will stay again when I'm back in Malacca!