For a short stay in December 2010, we bid on Priceline for a 3-star hotel in the Lake Buena Vista area, and got the Fairfield Inn LBV in Marriott Village for $35 a night. If you book with the hotel, it's usually around $79-$99. Marriott Village is a gated area with three hotels and a food court, about a mile from the Downtown Disney entrance. It's not pretty (lots of concrete, not many trees), but it's clean and well kept. Our mattress was in better shape than the one at a pricier Residence Inn elsewhere in Florida. The Fairfield throws in a decent breakfast buffet, including hot egg dishes (even at the Priceline rate).
I like bidding in the LBV area because the Route 535 strip is less tacky than 192, and because most of the LBV hotels don't charge resort fees. (Don't get me started on resort fees.) One caveat is that DTD traffic backs up something fierce. See the Unofficial Guide for ways to avoid traffic to and from your desired Disney destination.