We are going to Oktoberfest and lodging in Munich is both hard to come by and expensive. Can you recommend a suburb/city outside of Munich that is easy to access by train (45 min or less)that might provide more affordable options?
Well, it's a little over 45 min to Munich, but two years ago at Oktoberfest I spent the last Saturday night of the celebration in Landsberg am Lech. It's just under an hour from Munich Hbf, with a change of trains a few minutes away in Kaufering. They had not raised their rates for Oktoberfest. I stayed in Augsburger Hof. I think they speak English, if that matters. Landsberg is a pretty little town and a worthwhile place to visit in it's own right.
I've only stayed in Pensions in Munich so I don't have a specific recommendation.
If I were trying to do what you want to do, I'd start with google maps. Search for Oktoberfest Munich Germany. You will see the S-Bahn is adjacent to the grounds. Follow the tracks and you will find a series of smaller towns (suburbs) that tie in directly to Oktoberfest. Look for recommended lodging on tripadvisor.com or in some of the more complete quidebooks (lonely planet, rough guide, michelin) - Rick's books have good suggestions but are pretty limited. I'm not sure how far out you will have to go to find something.
Hope that helps a little.