I have been booked into sofitel plaza hotel in Hanoi by the travel agent but now want to change for what I really asked for-a smaller hotel with character in the Old district which is not noisy and reasonable price. I prefer interesting cheaper character hotels to modern ones.
Please give suggestions for me in Hanoi, Hue, Hoi An and Saigon. Thank you.
Also do I book flights and hotels on the internet before we go or when there?

Basically, you got the wrong Sofitel. What you probably want is the Sofitel Metropole, an old colonial era hotel on the edge of the old quarter.

Unfortunately, a lot of the old hotels in Vietnam lack character. Many of them were state-run in the old days, some still are, and they have all the negative attributes you would associate with that - poor to non-existent maintenance, apathetic staff, bad food, etc.

In Hue, the Morin is a good choice. In Hoi An, either the Hoi An or the original Vinh Hung, although both can be noisy, which is a common complaint of hotels in the old city. In Saigon, the New Majestic is probably the best of the old hotels.

I always book hotels in advance. The nice, small places are going to be booked up if you wait. The days when you can just show up and get a good rate are mostly long gone. You may get a good rate on airfare if you book in country, but it depends on how tight your schedule is.

We liked the Hoi An Hotel and didn't find it noisy. In Hue we stayed at Huong Giang, a big hotel on the river that was very nice and quiet if you get the riverview rooms. In Hanoi, finding a smaller hotel in the Old Quarter that is also quiet is not so easy. We stayed at the Hong Ngoc 1 for about $40 with breakfast and it was just fine in many ways, but I needed earplugs to sleep in the front rooms (and the back rooms are dark). You might want to stick with the Sofitel Metropole, but I definitely agree you don't want the Sofitel Plaza because of its location. We did book hotels ahead on the internet because it saves time and because we were there in December, which is a busy time. We used directrooms.com, but others have used asiarooms.com and other sources. I found that when I emailed the hotels directly some didn't answer.

I stayed in the WIN Hotel in Hanoi - well located, cheap and cheerful at $35US a night. But if you stay there, book a first floor room with a balcony, at at worst, a 2nd floor room. Otherwise you may got nuts. I was initially put in a top floor room - 72 steps! After collapsing on the bed, I picked up the phone, and got a 1st floor room. It was excellent, although the WIN's breakfasts are very basic.

Stayed in the Hoi An Hotel, and didn't really find it noisy. It was convenient and an easy walk down to the river. Very good included breakfast plus a good pool.

Stayed in the Duxton in Saigon. Amazing included breakfast, and centrally located. Smallish pool that is in shade after about 1 pm. But a modern and comfortable establishment. Meals other than breakfast (which, as I say, is included) are very expensive.

In Hanoi, I liked the DeSyloia. It's a small boutique hotel not far from the lake, but out of the very noisy old town area. The rooms are nice, the staff is wonderful and the hotel restaurant is one you might want to eat at even if you weren't staying there!

PS: I should have added that I did all my bookings online as I travelled, and used www.vietnamstay.com which was reliable and efficient, especially with the airport-hotel transfers. And I didn't have to pay in advance.

Check out the Grande Hotel in HCMC. Right on Dong Khoi and quieter than the Majestic.

http://www.grandhotel.com.vn/news.php

We stayed at the DeSyloia when we were in Hanoi in 2005 and quite liked it. The rooms were nice and quite comfortable, the service great and while you can find a location that may be a little closer to the lake we enjoyed the DeSyloia very much. We're going back in February and won't hesitate to book again. In Hoi An we're considering the Thien Thanh Hotel which seems to get good reviews. We're also looking at the Hoi An. Anyone have any experience there?