We stayed in the
Empress Hotel in the Tremé - which describes itself as a European-style hotel; I think they may mean hostel. You get a bed, and a table, and a badly-mounted TV. Perhaps you can pay extra for a window without frosted glass. It wasn't particularly cheap, but it was one of the cheapest deals going, and it did the job. Certainly not worth writing home about.
The city though? It's a real party town, and I got the impression it's a bit like that all year round, not just at Mardi Gras.
Recommended:
Historic New Orleans Tours' French Quarter walking tour, the
Katrina and Beyond exhibit at the Presbytere. Pretty much everything we ate, too. Not recommended: absinthe. Followed by chartreuse.
The party starts early on Mardi Gras itself - people were dancing and drinking outside the Backstreet Cultural Museum by 8.30. Apparently at midnight, they clear Bourbon Street with mounted police and street sweepers.
You can lots more of my photos over on flickr