The best budget choice is Hotel Diego Portales (Av. Bernardo O’Higgins 701, tel. 072/714696, US$12 pp), with private baths but without breakfast. Hotel Marcano (Manuel Rodríguez 968, tel. 072/714759, fax 072/713943, US$22/35–39/54) has a few rooms with shared bath, but most have private facilities.
The best accommodations and food are at the Casa Silva winery on the Ruta del Vino de Colchagua [1].
Links:
[1] http://www.moon.com/destinations/chile/chilean-heartland/southern-heartland/santa-cruz/sights/ruta-del-vino-de-colchagua