The two areas of town to stay in would be downtown or east Memphis. I wouldn't burn a timeshare week in Memphis; you can hit the highlights in two or three nights.
In downtown there is a Hampton Inn that has very good reviews, or if you want a very "Memphis" experience you can stay at the Peabody hotel downtown. There are other nice hotels downtown, but the Peabody is unique.
In east Memphis the Doubletree hotel does a good job and has a few restaurants within walking distance.
The area around Graceland isn't very safe, but if that is the only thing you wanted to see there is one airport hotels that would be fine. The Courtyard Memphis Airport on Nonconnah Boulevard is nice and clean, there just isn't much around there.
Things to do -
Memphis Zoo is excellent
Childrens Museum is good
National Civil Rights Museum
Stax Museum
Music on Beale St. (BB Kings, Rum Boogie, Kings Pallace, Blues City)
Gibson Guitar Factory
Mud Island (Museum and river information)
Sun Studios
Peabody Hotel Ducks and Rooftop view
Eat BBQ - Rendevouzs, Corky's, Interstate, BBQ Shop