I'm on my way to Kyoto in a few hours (it's 6am Sunday now) and will be staying for my 1st time at the Westin Miyako. I've stayed in several other places before and will babble some thoughts comparing them all in a day or 2 once I've got a feel for the Miyako. In brief, though, the station itself isn't in an especially interesting location, and my preference is to stay somewhere that is close to interesting spots and has easy subway/train/other access to the station.

In Kanazawa, this is special, located in one of the three geisha districts. http://www.machiya-kanazawa.jp/english/index.html
In Kyoto, I personally favor the Hyatt Regency and for a ryokan, Hoshinoya Kyoto in Arashiyama. If you did Hoshinoya one night and the Hyatt the rest the price would average out to your budget.
You really should send me e-mail as I can set you up with lots of stuff and get you preferred rates at the machiya in Kanazawa I linked above. k.keefe at ajkanazawa dot com

Kim, I just sent you an e-mail. Thanks for your offer to help.

Kim, you are the best! When are you coming to New York??

Craig, I've sent you a looonnnggg mail.

Elaine...right now I'm in Cannes for the International Luxury Travel Market! Going to Florida end of February but not New York. Wish I could but no time. Actually, will you go to Florida? I think I remember that you do at least sometimes. When are you coming back to Japan?

Westin Miyako is a nice hotel, not a great location but there is a shuttle to Kyoto station that stops, IIRC, at a subway stop. Staying in a club floor was worthwhile. I've read that the low-end rooms are not that great. I would go back but only on a cash+points deal.

Ryokan and hotels offer different sorts of experiences. A large part of the ryokan experience, and cost, is the dinner. As Kim suggested, one night in a Kyoto ryokan and the other nights in a hotel is a good plan.

Here is a great source of info about ryokan:
http://www.japaneseguesthouses.com/about/ryokan/index.htm

Spend some time on that site. In particular, click on ryokan styles and read the bit about gassho zukuri. In Shirakawago, I can recommend the Koemon gassho zukuri.

FWIW, I have stayed in Kanazawa three times. First was at a Holiday Inn (not Crowne Plaza, I think and it may not be an HI anymore). Not bad location, decent sized room, and it had a Western style bathtub. Second was an APA hotel, typical business hotel (very small room), good location (I think KimJapan has recommended the Toyoko or other chain across the street). It was a good stay for a night or two. Third was the Hotel Resol Trinity, business hotel, good location. I couldn't get the temperature right: the window tilted inwards and then there was a a rush of air coming from under the door and out the window (wrong direction!) and when I opened the door the window slammed shut.

For under ¥8,000/night, any of the business hotels like APA, Toyoko Inn or Resol Trinity are pretty much the same in terms of rooms and service...none are any better than what you pay for, though Resol Trinity is the most "stylish" of the business hotels. Nikko (JAL) and Crowne Plaza (ANA) are proper hotels but be sure to book the better rooms at both for size and nicer decor. Service is good at both.

In S-go, Koemon that mrwnrfl mentions has a prime location right in the middle of the village and they speak some English there. It is often sold out far in advance.

Another vote for the Westin Miyako in Kyoto. While it is a big Western hotel with all the comforts you'd expect with it, it is around the corner from a subway stop and is within walking distance Heian Shrine, a must see, and from the Philosopher's Path with a few must-see temples such as Eikan-do and Ginkaku-ji. Like others have said, the hotel also offers a shuttle to Kyoto Train Station and the Gion Shijo shopping area. A hidden gem are the walking paths into the Higashiyama hills in eastern Kyoto that you can easily access from the hotel.

I stayed in the Granvia years ago - big rooms, very conveniently located above Kyoto Station. Not quaint and cute like a ryokan, but staying in a large train station is an experience of it's own. We utilized the bus system to get around Kyoto, it was very easy.

Just had a really poor experience at the Westin Miyako. Had planned to stay 3 nights, instead left after 1.

First the good: I think the Westin Miyako's location is very good. It's just around the corner from a subway station on the Tozai line, so you can easily be in the shopping center area or Kyoto station in 10-15 minutes. The hotel is on the edge of the eastern hills, so it's a pleasant walk to lots of sites. As stated above, several walking paths are just behind the hotel. There's also an interesting-looking okonomiyaki shop just down the hill, no more than 5 minutes away, which I'd have tried had I stayed at the hotel.

Now the not-so-good: I was disappointed by both the physical condition f the hotel and by the training and/or attitude of virtually all of the staff I encountered. Without going into excruciating detail, suffice it to say that significant portions of both the public areas and the guest rooms are in shockingly poor shape. As bad or worse, the training and attitude of the personnel I encountered was easily the worst I've ever experienced in Japan. This didn't seem to be an issue of a couple of individuals having a bad day -- it seemed like something far more endemic to how the hotel is managed. This even extended to the restaurant, where a beef curry (which should be hard to screw up) was absolutely foul and nearly meatless. The final straw was when I asked to change rooms, and was offered a room that was worse in every respect than my original room.

I've been to Japan on many occasions, and this is the first time and first place where I felt distinctly unwelcome. After being offered the inferior room, I immediately checked out and moved to the Hyatt, where I was welcomed warmly.

Sorry you had a bad experience, Don. I must admit, I'm a bit surprised to hear about the negative attitude of the staff you've experienced at the Miyako. I was there in February and it seems like we stayed at two completely different hotels.

Have not been to Kanazawa as of yet but the old Ochaya that Kim recommends looks like a very unique experience. Hopefully Bob and Karen are reading along. We have been to Kyoto on several occasions and I highly recommend the Hyatt Kyoto. I know your dislike for the chain hotels Craig, but the ones in Japan, especially the Hyatt in Gora, are truly unique and can be an oasis to return to after a day of sightseeing. The Hyatts do blend in the local culture along with their international(read US)themes. The Hyatt is right next to Sanjusangendo(one of my favorite venues in Kyoto)and you can walk up to Kiyomizudera from here. In fact we walked up to Kiyo then down to Shijo Dori(the shopping street) and the Gion one day during peak koyo time to avoid the buses and taxi's which are of little use when your that close to a popular venue......you'll see why.

The Hyatt Kyoto does not have a club room however, which is a shame actually with a Hyatt of this size but this place is popular amongst the Japanese local and foreign tourists alike so a good blend of clientele here. The price keeps the tour bus crowds away. Good location to the main train station only a short 5 minute taxi which usually doesn't go far enough for meter to click past first drop. There are bus stops right outside and across the street so you can catch the Kyoto buses either way if you are so inclined. And if you are, learn a lot about Kyoto bus riding and Kyoto transportation in general here:

http://www.japan-guide.com/e/e2015.html

http://www.japan-guide.com/e/e2363.html

I have also stayed at the Granvia at the Kyoto Station. Very good hotel but the rooms are not as large and are in between the business size rooms and the rooms at the nicer venues like the Hyatt or Okura. The Kyoto Station area and shops we find to be a treasure trove of good shopping and some really good restaurants. The station and adjacent shopping areas above ground as well as the huge underground mall(The Portal or some name similar)make the station a must stop and see place in our Kyoto itineraries. The local entertainment held on occasional weekends and the yatai vendors who set up on weekend nights outside the surrounding neighborhoods are classic examples of the local life a tourist should see.

The ryokan suggested in Arashiyama looks fantastic. With its own private boat entry.....must be a place that's a picture with every turn.

Aloha!