Hotel Amadeus, without any doubt the best I've stayed in in Krakow and reasonably priced. The Ascot was OK (a bit cheaper), but not as close to the square as the Amadeus. Be prepared to walk a lot - great city to explore (especially the old quarter) Trips out to the Salt Mines and Auschwitz are a must, but leave a good day for Auschwitz.. Book when you get there, via your hotel, it was cheaper than booking in advance.
I tend to use Expedia to get a good list of hotels for any city (even if i don't book through them). You get to see the pics etc, location and read other peoples reviews.