You should be able to get downtown reasonably quickly by cab at that time of night. I believe that there is an airport express bus to downtown. During the day this would be probably the best combination of price to time. I know that the TTC runs a bus service to the Kipling Subway station. From there you could get access to downtown. Of the three, at that time of night, even assuming no delays, the cab would probably your best choice.

Now, the key question has to be what is your destination and what interests you when you visit a city.
Queen Street West
If you want to see an area of the city that has galleries and is undergoing gentrification, then I would suggest that you stay at either the Gladstone Hotel or the Drake Hotel along Queen Street West. Be warned however, these hotels are not to everyone's taste. They would appeal to younger edgier travellers. There are galleries nearby and the Queen Street Car provides fairly quick access to downtown.

Entertainment District
If you want to be downtown in the entertainment district near Roy Thomson Hall and the various theatres, then the Soho Metropolitan or Hotel Le Germain for boutique hotels would be worthwhile. Also there is a Holiday Inn along King West.

Downtown Core
If your tastes run to the more mainstream hotels in the central core, then there are the usual suspects of Sheraton, Hilton, Intercontinetal, the King Edward and the Fairmont Royal York. If you wish to be by the water, then there are the Westin Harbourcastle and the Radisson Admiral.

Yorkville
For shopping and top end hotels, then this is the place to be. The choices are the Four Seasons, Park Hyatt, Intercontinental, Marriott, and the Windsor Arms. You can usually get the Marriott at Bloor & Yonge on Priceline at a very reasonable rate. It also has good access to the subway system. For shopping the places to visit are Holt Renfrew and William Ashley China along Bloor Street.