If you're like me and would rather stay in a hotel room than a hostel dorm, the Hotel Newton is a good option. It's relatively cheap. My friend and I paid $110 dollars for a twin room, and we booked late, so if you book early you could get cheaper as room rates start at $85 for a double. However there are AAA discounts available and special internet offers-try www.newyorkhotel.com
In addition to a good rate, the hotel has the added bonus of being nice and is AAA approved. The furnishings are modern and the rooms are clean if small and our ensuite bathroom was tiny, but then we didn't spend much time in there!! It is also handy for the tube, just a block away from the station which will then take you into the heart of Manhatten with no changes. The staff were also friendly and there was room service till late provided by a local diner. There were also quite a few eating places around the hotel open late, if you fancy eating out but don't want to go too far afield-but there is one across and just down the road which offers nice milkshakes but the food isn't very good...if only I could remember the name??