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We will be in Rio during carnival. Advice needed please.

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We are doing a south america trip in Jan/Feb and have decided to add Rio to the list. I just realized we will be there the week of Carnival, so want to get on to booking this soon.
Feb 8-16 2014 or there abouts.
I have looked on the posts but alot of them are older so thinking the information may not be still relevant.

What is the best area to stay in, that is not too expensive? I realize that the prices will be inflated this week.

Where can we buy tickets to events that are not overly inflated by brokers? What would be the best events to get tickets to ahead of time.

Any advice is most appreciated. We are so excited that our trip has coincided with Carnival!! Thanks in advance.