Tokyo is extraordinary. Go. If you are planning to go outside of Tokyo, get a rail-pass at a travel agent here in the U.S. before you go. You can get a pass for about $250 and ride the high speed trains all over Japan for a week. (it also works on JR subway lines, busses, and a ferry) Depending on where you are going, that can be many hundreds of dollars less expensive than buying the tickets there. JTBUSA has rail tickets and discount flights
If you can afford it, the Shinjuku Park Hyatt is the way to go. It's an amazing hotel. Or, if you are on my budget, you can stay at City Hotel Lornstar
It's about $77 a night and really close to the subway station. If that is still more than you want to spend, try Hotel New Koyo
Its about $25 bucks a night for a room a little bigger than a bed, but I don't go to Tokyo to spend a lot of time lounging around in a hotel room. At $25 the ten minute walk to the subway station, shared restrooms (clean and plenty of them), and shower (clean and not that many of them), and its relative distance from the "night spots" is well worth it. Also, it will be a blessing to come back to your hotel after a long tourist day in Tokyo and be able to speak english to someone. Its probably literally the least expensive place in Tokyo to stay, so it attracts college students and budget travellers from all over. At any given point in time, about half the population of that hotel is from English speaking countries. Canada/Australia/Europe/US/ Etc. Also I would suggest that you take a good guide book. I know its a total tourist giveaway, but you always have an English subway map handy, plus things can be really hard to find if you don't have maps or very clear directions written by someone who ACTUALLY speaks english. Half the fun of Japan is getting lost, but when you are tired and want to go lay down - getting found quickly is also very nice. I reccomend Time Out Tokyo, but look through a bunch before you buy one. I'm going back in the spring. And I think J might be coming with... I'm so excited.