I live in the suburbs of Austin and I work in downtown Austin. My favorite Austin neighborhood is Hyde Park. It is a historic neighborhood filled with adorable bungalows and is 10 minutes from downtown/UT.

I don't have any hotel recommendations but there is a bed & breakfast in Hyde Park that is under $200 per night.
http://www.theadamshouse.com/index.shtml

For activities, I suggest:
Lady Bird Johnson Wildflower Center: http://www.wildflower.org/
Zilker Botanical Gardens: http://www.zilkergarden.org/index.html
Elisabet Ney Museum: http://www.austintexas.gov/department/elisabet-ney-museum (This is in Hyde Park.)
Bob Bullock Museum: http://www.thestoryoftexas.com/

Austin is for all ages! I enjoy visiting there now as much as I did when I went to UT. (And I'm a whole lot closer to my mid-60's than my mid 20's).

When we go to Austin, we generally stay at the Embassy Suites Town Lake or nearby (mainly so my DH can run in the mornings around the lake.) It's a nice hotel and a quick drive to UT.

I like all of the activities that Louistraveler suggested. Here are a couple more that you might like:

1) The shops on South Congress Avenue are a lot of fun. (I'll bet you can't resist buying something, especially at Big Top Candy!) Here's a short article about some of them: http://austin.smallplanetguide.com/rentals/index.php?p=soco_austin_neighborhood

2) Take a Segway tour to get an overview of some of Austin and it's fascinating history. Even though I have spent a lot of time in Austin, I learned a lot on the Segway tour we took a couple years ago. And riding Segways are such great fun! Here's the company we used: http://www.segwaynationinc.com/austin/

Thanks for the help... any suggestion for moderately priced hotels (under $200 nite) in the downtown area... or other suggestions as I expect to get a car.

Thanks

No suggestions for you. But I do recommend you find out the dates of the South by Southwest (SXSW) conference and be sure to arrive well after it.

SXSW is March 8-17. Try Embassy Suites on Town Lake.

I've stayed at the Embassy Suites and agree with the recommendation--it is a great location and the last time I stayed there (about 18 months ago) they had a free shuttle that would take you wherever you wanted to go within a certain radius--even if you have a car, it's handy not to have to worry about parking or directions.

Also concur regarding the botanical garden and Bob Bullock museum--have been to and enjoyed both, as well as the fun shopping on South Congress. Although I have not been, there is an art museum just across the street from the history museum that looks nice--I think it is the Blanton? And the capitol building is very impressive.