Accommodations in Banos (Update)
Area Map Banos Map
Places I have stayed
*Hostal Castillo - Martinez just past Santa Clara - $4.00 con bano privado, hot water, and TV. Some rooms (eg 15) have view of waterfall. Quiet (except for AM rooster and parrot). Weird monkey in big cage. Garden with parrot.
*Hostal Casa Real - Montalvo close to waterfall (next to Palace) - $4.00 con bano privado, hot water, and TV. Some rooms (eg 102) have view of waterfall. Somewhat quieter and cleaner than Castillo.
*Hostal Charvic - Oriente y Maldonado - $4.00 con bano privado, some rooms with TV, but no hot water (in two days I was there). No closet. Lots of street noise. Comfy but not great.
*Hostal San Cristobal - 16 Diciembre y Martinez - $5.60 con bano privado, hot water, and TV. $4.48 without TV. Quiet (except for AM rooster and birds). No closet.

Places I have seen....
Plantas y Blanco - $5 - (Martinez y 12 de Noviembre) - rooftop terrace with great views of hot baths, waterfall, and the church. Guests are treated to a number of goodies including honor-system beer, board games, VCR, laundry, steam room, and storage. Some have complained about the traffic noise at night - but others have loved it. (NJ) - $8/person, breakfast - safe and yummy, excellent roof cabana.(OW) - $5/per person. It didn't have a private bath and it faced the street (PB)
Isla de Banos - Halfiantes 34 y Montalvo - $7.00 + 12% tax. - quite nice with lush gardens and a wood-beamed lobby, it is expensive by Baños standards. (MY)
La Petite Auberge - 16 Diciembre y Montalvo (across from San Cristobal) - $10 + 12% tax - includes breakfast. Hammocks on balconies. Nice gardens.
Villa Gertrude - Montalvo 2075 - $10 + 12% tax - includes breakfast. Access to pool. Bathtubs and closets in most rooms. Posh. Seems to cater to blue-haired ladies.
Hosteria Monte Selva - Halfiantes y Montalvo - $15.00. Very posh. Large grounds, horses, pool, etc. See website - Consists of bungalows on the side of the hill (actually, Tungurahua!) overlooking Baños. It was a nice setting: lush vegetation, resident peacock and llama, sauna and steam room.(NJ)
Hotel Sangay - $20 - located at the base of a waterfall and next to the hot springs in Baños.
Hotel Palace - Montalvo next to the falls - $21 + 12% tax - includes breakfast. Sauna. Very posh (and snarky).
Luna Runtun - $108 and up - perched above Baños in the shadow of giant Volcano Tunguragua. Luna Runtun is the only luxury hotel in the Baños area.

Places I haven't seen....
Hotel Orquideas - $11 - clean rooms, private bathroom and a beautiful garden.(AB)
Hotel Residencial Baños - $4 Parque Central, Ambato Ave. ... has basic rooms with or without private baths and hot water. (MY)
Los Nevados - $4.50 - clean modern room, private bath with hot shower, towel and a bed. There is a communal kitchen guests can use upstairs. (NJ)
Café Cultura - $15 - $17 - Same owners as Hotel by same name in Quito.
Youth Hostel - No Price - ...across the street from Hosteria Monte Selva - German-run - looked like a good place to stay also.(NJ)

Places to eat
El Paisan - 288 Santa Clara y Martinez - Proprietor Luis Marcello Barahona. A vegetarian restaurant and art gallery. Great place for big breakfasts. Just have whatever he suggests (usually a tortilla (omelette) with juice, tea, dessert, etc for $2.00). Luis also speaks easy Spanish, does catered treks to the cascades, and is generally fun to be with.
Cafe Hood - Martinez near Maldonado - Proprietor Ray Hood. A gringo hangout. Ray is an ex-pat American. Good cheap food and beer here (I usually have the large Mexican chili for $1.40). Also book exchange and free movies every night. There is also a Cafe Hood on one of the streets facing Parque Central. It belongs to Ray's ex-wife.
La Chimenea - 865 Oriente - A good place for baked chicken and rice at good prices. Opens at 6:00 PM. Crowded by 7:00. Very Ecuadorian.
Plantas y Blanco - Martinez y 12 de Noviembre - Good place for breakfast. Buzz the front door and say "Desayuno, por favor". When they let you in walk up to the roof. You'll figure it out....
Vaquita's - 2050 Montalvo between Santa Clara and Villa Gertrude. If you're tired of eggs, this is a good place for muesli and fruit in yogurt - if you're into that sort of thing.