I will be spending a few days in Tokyo in December...the last time I was there, I saw an interesting day tour to Hakone that I did not have time to enjoy. This time I have a few more days - and I was wondering if it would be a good idea to stay in Hakone for a night or two? In my reading the (very helpful) threads on this site, seems maybe one night would be enough? I would love any feedback on Hakone - is it an interesting town to walk around, or really just a base for touring and doing the 'loop'?

Also, if I want to get there, with a decent sized suitcase, what would be the best way from Tokyo? Lastly, any tips on lodging (ideally no more than $250US/night) or anything else about that area would be greatly, greatly appreciated. Thanks so much....

One night would be alright, two nights would be perfect in my book.

Most people think of Hakone as a one town show. It is actually the area in and around the little town of Hakone that you will be interested in seeing. In fact there are a myriad of small towns that make up the Hakone area that should be of interest to you. I would prefer to stay in a ryokan in the town of Gora. My second preference would be in the Hakone-machi area or maybe even Miyanoshita. Check these sites for information

http://www.japan-guide.com/e/e5206.html

http://www.jpinn.com/

http://www.japaneseguesthouses.com/db/hakone/index.htm

http://www.jnto.go.jp/eng/location/rtg/pdf/pg-307.pdf

http://www.nikkanren.or.jp/english/

Aloha!

Hawaiian traveler is a lot more experienced in Japan than me but I'll add my two cents. We went to Hakone for one night this summer. One night was quite enough for us. We did the Hakone loop, which is what you may want to do. You can't do it with any suitcases, just take what you need for one night. You can have your suitucase shipped to your next destination or to the airport. Changing different means of transportation and enjoying the sights along the way (that's how you do the loop) we got to our ryokan at about 3-4 pm, where we spent the rest of the day to relax and the night. We did the rest of the loop next morning on our way to Tokyo. You can find the map of the loop and lots of useful information on what to do in Hakone at www.japan-guide.com (mentioned by the previous post). Good luck.

One more thing. I think a Hakone free pass will save you some money and time. You can get it at the train station before starting the loop.

Hakone is famous for hotsprings. We went there as a sidetrip for that purpose and it did not disappoint.
We stayed in a ryokan( i forgot the name) for 2 night and there is a hotspring bath outside of my room in a very simple but tasteful japanese garden. it was outdoor and beautuful. The water was relaxing and healing and it did wonders for the joints.
I have been to many hotsprings in the world and that water is one of the best.
If you are into hotsprings( i think it is a great cultural experience as well as for health), there is such a little book called Japanese hotsprings.
I believe we took the bullet train from Toyko. It was over ten years ago and I cannot remember much details exact it was good.

In addition to shipping your suitcase to the airport or your next destination your options include:
a) leaving the bag at your Tokyo hotel, if you are returning to it
b) storing it in a locker at the train or bus station.

Other luggage options not mentioned here are either drop off at your ryokan/hotel early before the check in time if it is convenient or use the Hakone Baggage Service operated by Tozan bus co., a Odakyu group. The office is located inside the Yumoto station and they will deliver to your ryokan/hotel while you are sightseeing.
http://hakone.syuriken.jp/hakone/1/carry.jpg
Left click to enlarge.
As fas as ryokans/hotels go, I suggest you narrow down, i.e. in-room onsen, view, indoor/outdoor, timed private/communal, etc.
I also suggest that you visit:
http://www.hakone.or.jp/english/index.html
You can learn more about Hakone and see the Lake Ashi and Mt. Fuji from the Hakone-Machi in real time by webcam. For example, on Lake Ashi, click the webcam icon, wait till your turn and start controlling. Play with it for fun.