I stayed at the Sheraton in April.
You can hear some engine noise from the cruise boats docked nearby, what made it so annoying was that some of the boat's weren't even in use and looked like they hadn't cruised for months yet their engines were still running!!!
Saying that because the hotel has no hotels either side of it the views from their Nile View rooms are spectacular and for me the view was more important than the noise made by the cruise boats.
I believe the bungalows have been recently refurbished and are now looking "very" nice. Only drawback is they don't have a balcony or terrace to sit out on. I also don't think you would be bothered by engine noise from any of the cruise boats staying in one of them.
The Sheraton is around a 10 - 15 minute walk from a wide range of restaurants, this map from Luxor Travel Tips should help further
http://www.luxortraveltips.com/maps/southluxor.htm (if you click on the blue boxes a review of the restaurant comes up) The hotel also provides a free shuttle bus seven times a day to take you into Luxor.
Here are a few photos I took of the hotel in April (the photo's are of the Nile View rooms, I believe the bungalows are slightly larger)
http://travel.webshots.com/album/577411053xPkJyH?start=0
Hope this helps,
Suzie