I'm not sure how much you know about DL, but it is not like WDW. I like to think of them as two unrelated places, even though they're both Disney.
DL is not it's own city like WDW is, rather it is a park plopped right in the middle of a city.
As WDW2002 mentioned, there are 3 hotels, the
Disneyland Hotel, Paradise Pier Hotel, and the Grand Californian Hotel. They are all comparable to deluxe resorts at WDW, though Paradise Pier is the least themed of the 3, and seem to have the most discounts available. DL Hotel is the next likely to have discounts available, and GC the least likely.
GC is really gorgeous, I just came back from a 4 night stay there. It can be best compared to Wilderness Lodge at WDW, yet very unique in it's theming. If you can afford it and it won't break the bank, I highly recommend it. Discounts are not easy to come by at DL as they are at WDW though. DC will give you 10% off the room rate. Sometimes Travelocity and Expedia have good rates at PP or DLH ($120-$150), but I've found it to be hit-and-miss as far as dates go.
Though I am one of those people who must stay onsite at WDW, I don't feel the same way about DL. I would love to stay at GC all the time, but I wouldn't be heartbroken if I had to stay at the Howard Johnson's across the street. If the DL Hotels are out of your price range, there are dozens of nice hotels that are very convenient (walking distance).
If you want to splurge and can afford it, I would go for GC or DLH. (But again, I REALLY liked GC!!!)