I've been to this place a few times over the years. Most recently I went to see The 3 Heads, Delfina, and a few other acoustic acts perform. I like that this place is a good alternative to the bars on pier avenue. We saw a number of great all acoustic acts without all the pretentiousness that you will find from 'the scene' down the street.
It's a small little place with a small stage...but it's not that small. It could probably seat 100 people. The atmosphere was very chilled out. All the acts were great. I'd give it five stars but if you ask me, it's a little pricey. $10 to get in the night I went with a two drink minimum. (I had to spend $10 to buy two cokes.) But i would go back again if the right acts were there.
It might pass you by if you aren't looking for it. It's right next to the Comedy and Magic club on the corner.
Live at the Lounge is sort of right next door/attached to the Hermosa Comedy & Magic Club. It's a pretty nice music venue with a cute outdoor patio. This venue books small acts  and I'm guessing mostly only acoustic since their stage area is so tiny.
My friends and I were walking by during the Fiesta Hermosa festival last  year and they had a small stage set up in their courtyard and the band I-94 caught our attention and we actually bought tickets to see their next show there. It's not like other venues where you can show up anytime, grab a drink and stand around it's an arrive before the show starts, sit down, order drinks, don't move and be quiet kind of place. Although I did enjoy some of the musical acts I felt the comedy acts between sets were unnecessary and didn't fit with the musical theme of the lounge.
Eventhough I like I-94 and the venue in general I haven't been back to see their other performances because when I go out hear and enjoy music I don't like being forced to sit through and entire show like a punished school kid.