I had a great stay at Le Meridien in August. It's considered one of the fanciest hotels in town, but is very reasonably priced based on western standards at about $100 a night. It's a bit further from the central part of town (10-15 min walk or so to the canal), but is right next to the Night Bazaar so there's plenty of food options and stuff to do/see. There are a few other higher end hotels in the area as well that you might want to investigate (names escape me).

A tip if you stay in the area - whenever you're taking the red taxi or tuk tuk walk a few blocks away from the hotel to get picked up. Drivers know Le Meridien is a nice hotel, and tend to ask you to pay extra if they know you're staying there. Likewise, when you want to head home, tell them to take you to the Night Bazaar, not Le Meridien.