If you decide to stay overnight in Aguas Calientes, I can recommend Wiracocha Inn. Its owner is very accomodating, everyone working there aims to please. We were met at the train station, and accompanied up to the hotel (somewhat of a hike) and once there we were given the room in the top front of the hotel which faces the river. I have read complaints about the noise the river makes, but we'd rather listen to the river that have no view at all. The room was clean and confortable, had a private bathroom (no towel though), and hot water. They stored our luggage the next morning while we explored Machu Picchu, and even lent us another room when we returned for $10 for four hours (we asked for this as a special request). Breakfast is included, with fresh OJ, coffee, bread...