In the Orquideas neighborhood is Hospedaje Q’ente (Las Orquideas near the soccer field, tel. 084/21-1110, US$9 s, US$12 d). Rooms here are basic but clean. Private baths are an additional US$1.50 per person. The main appeal is the neighborhood itself, which has a soccer field and a small-town feel that is a welcome respite from the hustle of Aguas Calientes.
Down by the train tracks, on the other side of town, is the decrepit but classic Hostal Los Caminantes (Imperio de los Incas 140, tel. 084/21-2007, US$9 pp). This old wooden building has been receiving backpackers for decades and has friendly management, even if the rooms have foam beds and are in need of renovation. Hot water and rooms with private baths are available (US$12 pp).
Hostal Pirwa (Pachacútec s/n, tel. 084/21-1170, reservaspirwa [at] gmail [dot] com, US$10 dorm room) is part of the Pirwa chain of hostels found throughout Peru. It is simple, clean, and a good place to meet other backpackers.
Off the road to Machu Picchu, just before Puente Ruinas, there is a municipal campground (US$10 pp). If you opt to camp, make sure you have plenty of bug repellent. The campground is right next to the river.
© Ross Wehner and Renée del Gaudio from Moon Peru, 3rd Edition