I used priceline back in March and won a 2.5* hotel on North Michigan Ave for $60 a night. The hotel was very nice, and was one block from the Water Tower. It's a great area, and the red line runs right through the area if they plan on using public transportation vs. paying for taxis.

Make sure your friends are aware that if they use priceline's name your own price bidding, it guarantees at least double occupancy. So they may end up getting a room that only has one bed. Some hotels in Chicago only have rooms with one bed (like the one I won above), so upgrading isn't an option, and there are no refunds. If your friends don't mind sharing a bed, testing priceline should get the best price.