Cuba Hotels
If you want to experience something of the real life of Cubans, the best places to stay are casas particulares (private houses licensed to offer lodging services to foreigners). They are cheaper than hotels (average CUC 20/room) and the food (breakfast CUC 3-4, dinner CUC 7-10) is almost always better than you would get in a hotel. Casas particulares are plentiful even in small towns; they are somewhat more expensive in Havana than elsewhere. Note that any service offered by a casa particular other than accommodation, such as driving you to the bus station, will be added to your bill, regardless of whether this is stated up front. Items such as bottled water supplied with your meal will also have a charge. Always make sure that you talk to the owner about what things will cost when you arrive to avoid unpleasant surprises later.
If travelling by bus, you will be accosted by jineteros (hustlers) trying to lead you to a casa, where they will get a commission and you will be charged the extra. For the best rates, arrange your accommodation in advance, either by asking your host to recommend someone or by using a casa particular association. Some will let you book accommodation over the internet before your trip, and will go out of their way to arrange accommodation for you while you are there.
Most small cities and larger towns have at least one state-run hotel, which is often in a restored colonial building. The prices range from around CUC 25 to CUC 100, depending on what you are getting. Resorts and high-end Havana hotels can be significantly more expensive.