Love, Love, Love San Antonio and have visited often. Most recently at Spring Break.
When its just DH and I, we use Priceline and stay on the Riverwalk. If your dates are not a busy time you can typically get a 4* Riverwalk for $50-$75. I only recommend the Riverwalk if youre willing to go 4* and stay right on the river. It gets a bit dodgy at night even just a few blocks away. Ive used Priceline when the kids were with us but usually bid on two rooms as, especially downtown, some of the hotels have very small rooms. You also have to pay for parking. When its just DH and I we spend 90% of our time downtown so its worth it. When the kids are with us, its more convenient to stay near LaCantera since we usually only go downtown once or twice. Spring Break we stayed here
http://www.starwoodhotels.com/fourpoints/property/overview/index.html?propertyID=3337
You can see La Cantera and Fiesta Texas from the hotel. I used Hotwire and got a good deal. My adult DS and DD14 were with us so the one bed risk associated with Priceline wasnt worth it. I tried to get 2 rooms on Priceline but that was a full occupancy week so low bids were not accepted. Bidding on the resort level on Priceline is a good idea. They are a vacation in themselves and worth bidding a bit higher.
As far as entertainment, we love Fiesta Tx. Its just the right size for a Six Flags park- not too much walking all over. Were over Sea World only because we went so much when the kids were little but its nice if you havent been too often. I hate Schlitterbahn because Im not a fan of standing around in a wet bathing suit and it gets so crowded that you will stand around. However if youve never been its a great water park. Just get there early and bail out when the Lazy River is so crowded you cant stand it.
Downtown- we like Market Square, the Alamo, I recommend The Alamo movie at the Rivercenter IMAX, take the river taxi tour, and just walk around.
I dont like the zoo in the summer time unless you dont have a nice zoo near you. Its very hot!
I like Fredericksburg but not with kids- just doesnt seem to interest them much.
Check out The Majestic and see whats going on there during your dates as they often have great shows. Check the dates on Ticketmaster for other things. Weve often seen great concerts the circus, or other shows in San Antonio - even The Royal Ballet a couple of years ago.
Its a great city!! Have fun!