I just bought individual tickets - they are much cheaper.
We didn't do any formal tours, we like the freedom of exploring ourselves (with guidance from Rick's books and other sources of information, of course).
We stayed at proper hotels, although not expensive or fancy. We stayed at U Zlateho Jelena in Prague. The rooms were spartan, but the breakfast was good, the rooms were clean, and the staff was very friendly. The location could hardly be beat - about two blocks from the Stare Mesto. If I stayed there again, I'd ask for an interior room, as the exterior rooms got a little loud at night (though not that bad). In Vienna, we stayed at the Hotel Erzerzhog Rainer - I would highly recommend this. It's about a 10 minute walk from the opera house, and very convenient to public transportation (it's a 5-7 minute walk to Karslplatz). The free breakfast was probably the best hotel breakfast I've ever had. One note though is that they don't have air conditioning, which wasn't a problem for us in May, but could be a problem in, say, August. In Budapest, we stayed at the Eurostars Budapest Centre. It was fine, a proper business hotel, very clean and with AC. Nothing special, you could probably do better (I was using points, so it was free for us).
If you have additional specific questions, I'd be happy to answer them.