My husband and I just returned from a long weekend in Budapest staying at the Manzard Panzio. The hotel is fine, simple and with a decent continental breakfast. The room was well lit and sunny and the area is quiet, but that is for good reason. It is miles and miles away from anything. The metro is a good 15 minute walk away and then another 15 minute or so ride to get to town. We had two local friends tell us that we should not walk or take public transportation to the hotel after dark and to take a cab. This significantly adds to your costs! We just wish we had consulted prior.
Basically, there was no going to the hotel for a rest once you were out without a considerable amount of effort and time which makes for long days.

May 2005 just returned from a ten-day visit to Budapest. Great relaxing city. My wife and I found the life and atmosphere a little like that of Paris. Also the building reminded us very much of Paris. Budapest is even easier to get around than Paris, they have a great public transportation system and we used the metro extensively. Waiting for a train on this system is almost non existent and it costs very little.
Walking is great also just keep your eyes open while crossing the streets! The food is simple but good and you can get a decent meal at almost any small restaurant. The one and only time I feel that I fell into a tourist trap was in having lunch at a pub called 'For Sale Pub'. The people seemed a bit strange for me and the atmosphere was supposed to be cute but ended up being dangerous and almost hole in the wall. I got gouged severely on the bill.
I stayed at a small pension called the Hotel Manzard Panzio. This was reasonable with Swedish style furnishings. The style of furniture that the international chain sells as kits. It was clean and the breakfast was reasonable. All in a quiet neighborhood.
Bottom Line... Stay away from, what I consider, tourist traps like For Sale Pub and you will have a great vacation!! Two thumbs up for Budapest!