It all depends on what you are looking for. For a nice but reasonably priced hotel in Cusco I would suggest Los Apus which has a great location near the Plaza de Armas. Or if you are looking for a hostel perhaps Pariwana which is a lovelly old colonial mansion. In Sacred Valley I would suggest either the Casa Andina private collection in Urubamba or Hostal Iskay in Ollantaytambo for something a little more basic.
I hope this helps.
Cheers almost 10 years ago