Hostal Quilla (Pachacútec s/n, tel. 084/21-1009, US$25 s, US$35 d) is on Pachacútec between Wiracocha and Túpac Inca Yupanqui. Rooms are plain with tile floors but service is friendly.
Hostal Kontiki (Las Orquideas, MZ A-9, tel. 084/984-296-340, hostalkontiki [at] hotmail [dot] com, US$20 s, US$30 d) is a clean and friendly hotel. Breakfast is included and English is spoken. For information on a guided tour of the areas and Machu Picchu, ask for Fernando, the hotel owner/manager.
A company named Sierra Andina operates three hotels in Aguas Calientes , all lined up next to one another on both sides of the tracks. We recommend two of them: the Machupicchu Hostal (Imperio de los Inca 313, tel. 084/21-1034, sierrandina [at] gmail [dot] com, US$35 s, US$40 d with breakfast), where rooms are arranged around a plant-filled courtyard overlooking the river. There is a sitting area with a great river view, and the rooms themselves are plain, clean, and comfortable.
Next door is the sister Presidente Hostal (Imperio de los Inca 135, tel. 084/21-1212, sierrandina [at] gmail [dot] com, US$60 s, US$65 d), a similar production with carpeted, bigger rooms. This place has the look and feel of a real hotel; rooms are pleasant, with earth-colored walls—ask for one that overlooks the river.