Jerry,
If you're travelling via train, it would be a good idea to stay in either Peschiera or Desenzano, as those are the only towns with rail stations. Sirmione is more difficult to access as you'll have to rely on Bus or Taxi. I agree with a previous comment that it's "touristy" and when I was there last September I found that to be a problem.
I'd recommend staying in Peschiera as it's a beautiful town with canals, and also a convenient location for accessing the boats (I believe they're based there), should you want to explore towns at the north end of the lake such as Limone or Malcesine.
For hotels in Peschiera, I stayed at Hotel Garden which is just a few steps from the station, and would definitely recommend it. It wasn't posh but the room was clean, the staff were great and the food in the restaurant was good (at least IMO). If you'd like something a bit more on the posh side, have a look at the Enjoy Garda Hotel which is also not too far from the station. It's easy to walk into town or to the boat docks from either hotel (I timed the walk from the hotel to docks at about 13 minutes).