I'm a big fan of PL for leisure travel. I hate uncertainty, so to this point I've always bid "tight" geographic zones (i.e., at-the-airport) or zones where there is only one hotel in my target class and I can look it up on a map before I bid. Since I've mostly been able to eliminate the uncertainty factor, the only downside for me is the flexibility. Therefore, I put a cancellable reservation on hold somewhere, and do my Priceline bidding about 2 weeks before travel, when I'm 95+% certain the trip will happen.

As for the hotel classes, I think PCLN does a good job making sure that 3-star means 3-star. Hotwire, on the other hand, plays it loose to their advantage: a 4-star HW might only be a 3-star on PCLN. I've read many experiences across geographies that indicate this is somewhat common. Therefore, I tend to trust Priceline when I bid 3- or 4-star. (I get Hiltons, Starwoods, and maybe at the worst a high-end Holiday Inn Select).

Regarding status: I know for a fact that I would never reach the top-tier in any hotel chain, even if I did all of my business/leisure stays at one chain. Therefore, I take mid-tier in all of them because you get that for calling up and asking for it. (Except Marriott: I had to earn Silver, then sign up for the credit card, and they've kept me at Gold ever since.)

Most hotels will be nice to you regarding room preference when staying on a PCLN rate and showing your Gold card. I have never gotten a big-time (suite) upgrade, but I've gotten concierge level in some cases, and almost always get my bed/smoke preferences. Starwood gives me the free breakfasts and free drink coupons. Hilton and Marriott don't. I don't really care about hotel breakfasts anyway...if I'm on the concierge level, I'll nibble a little bit in the lounge. If not: I don't worry about it.

Only leisure stays where I shy away from Priceline are when we absolutely need a specific room type. For example: four of us traveling and we need two double beds. Then we book Marriott (unless a 2-room Priceline bid would STILL save us big money), because they absolutely guarantee room type, or they give you cash back or a second room.