Compared to the rest of the country, lodging in Aguas Calientes  is exorbitantly expensive. The cleanest budget places are in the Orquideas neighborhood, across from the Río Aguas Calientes, which flows from the hot baths and cleaves the town in two.
In Aguas Calientes, forking over a bit more dough to be in the US$25–50 range buys a lot of extra comfort, hot water, and river views. The most upscale hotels are slightly outside of town. The Machu Picchu Pueblo Hotel  is upstream from town and the Machu Picchu Sanctuary Lodge  is next to the ruins themselves.
Downstream from Machu Picchu, Santa Teresa used to have a few backpacker lodges and a stunning river-side pool that was destroyed in the January 2010 floods. Before heading to Santa Teresa, check on whether these services are once again available.