In Oaxaca, we stayed in Los Bugambilias, a B&B. As proprietors were everywhere we traveled in Mexico, the hosts, René and Claudia, were very cordial and always helpful. Our room was spacious, brightly decorated, comfortable, and the plumbing functioned as intended (a rarity in Mexico). The room came with a Siamese named Felicia who loved to jump on the bed.
Bugambilias' family-owned restaurant, La Olla, not only served the least expensive meals but also consistently the best we sat down to in Oaxaca. The full lunch "Comida Corrida" for two, which included soup, vegetable, chicken, bread, dessert, two bottles of water, coke and XX beer, was under eight U.S. dollars. As an added bonus, the B&B's central location also put us within easy walking distance of just about everything we wanted to see or do.