We have stayed at the Hilton, Holiday Inn, and Royal Plaza all right by Downtown Disney. In fact I just stopped and stayed by myself at the HI on my way home from taking care of family last month. No, it is *not* like staying on site but the DTD hotels are very nice and affordable. Of the three, I liked the Holiday Inn the best. The valet service is exceptional with the kindest folks you can imagine. They know me from previous trips, can see the entire parking lot, and are always watching to make sure you get in and out okay. Parking is $10 for non-valet and I think $14 for valet. That particular hotel does NOT charge the resort fee that all the others charge so as you look at hotels and costs, keep that in mind. If you go on TripAdvisor.com you will see very few bad reviews of the hotel.
The Hilton was okay. I was quite disappointed in them during our last stay and it had a lot to do with finding blood all over our sheets on our first night there and the folks at the hotel saying it was okay because it was obvious that the sheets had gone through the wash, but the washing hadn't gotten all the blood out.....so gross! Their parking is more expensive, staff was not friendly, and the parking lot was huge and actually creepy at night.
Royal Plaza....meh.....nothing great, nothing not so great. I felt nickled and dimed there.
When you add in a rental car, unless you really want to have one, staying at the offsite/DTD resorts is a great way to go. Transportation is available all the time.