The one night I spend at a supposed 3* hotel in Bali, somewhere between Denpasar and Kuta Beach was not very enjoyable. Though I booked it as part of the Expedia / Qatar deal, I would have been better off booking something else as this place was crap.
If you're trying to stick to a budget, can't go wrong with staying somewhere along Kuta beach, at least you'll be in the heart of things. With no public transport, using taxis to get to the main strip gets expensive really quickly.