There are very few nice places to stay on the US side of the falls. There are 3 good hotels....the Hampton Inn on Rainbow Blvd, the Crowne Plaza on Third St. and the Holiday Inn that used to be the Sheraton Four Points, it's on Rainbow Blvd but I think the address is on the side st. Aside from those there are a ton of Days Inn/Super 8 type places and most are a little dodgie. There is also the hotel that is attached to the Seneca casino which is rather expensive.
If you go over towards the Prime outlet mall there is a new Holiday Inn Express on Niagara Falls Blvd that is nice and a little further down the road is a brand new Motel 6. I'm sure that it will be very basic like a college dorm but it's new so odds are that it will be clean and acceptable.
If you stay on the Canadian side of the falls there are a ton of nice hotels with the Fallsview area being the nicest. Outside of that area there are several others that I can tell you about if interested.
No B&B's though, sorry.