Most hotels are lined up along the sleazy beachfront of Copacabana, an area that's as famous for its spectacular beach as for its pickpockets and rampant sex tourism.
If yo're plannong on staying in a hotel in Rio you're best off looking at Ipanema though it can be fairly expensive, prices for rooms starting at around $80 a night.
The hostel and backpacker scene is more centred around the neighbourhood of Catete which is about 20 minutes on the metro from Copacabana and much closer to the cool nightlife of Lapa. Here you can get a small room to yourself for around $12-25 a night. The area is pretty safe though you shouldn't wander too far away on foot late at night.
One of the best options for the traveler in Rio de Janeiro is to rent an apartment. There are short term option available (look for notices advertising apartamentos de temporada) for as short a stay as a week at inflated prices that still work out reasonably if you're sharing with friends.
If you're planning on hanging around for a few months in Rio then you can find aparments in Ipanema and Leblon for around 700-1500 reais ($300-600) a month. The apartments at the cheaper end of the scale might be simple studios but you're guaranteed to be just a few blocks from the beach.
There are cheaper apartments in Copacabana for around 300-500 reais ($150-250) but then you have to deal with all the congestion, the racket from the streets and the petty crime.
Downtown in Catete, Flamengo, Niteroi or Lapa you can probably find a studio apartment for around 300 reais ($150) or so but you won't be all that near the beach and you should definitely know your way around and speak some Portuguese if you don't want to get mugged once a week on your way home.
A cool neighbourhood for the freaky traveler is the alternative Santa Teresa, an area set up on a hill above Lapa and surrounded by favelas - it's a hangout of artists and musicians and best represents the bohemian side of Rio.
A cool place to live for the alternative traveler is Santa Teresa, a hangout of freaks and artists that represent the counter culture of Rio.
As and when you do get yourself set up in an apartment in Rio remember to be really nice to the porters who work at the front desk. They double as security, information and trouble shooters. They often come from the poorer regions of Brazil and appreciate a tip once in a while. You'll be glad you did when you need them to get your upstairs neighbour to stop practicing his electric guitar at 4 in the morning.