If you are not particular about Rome area to stay then priceline is good option. Bid on 3 or 4 star hotel for $125 or you can try www.laterooms.com to see what is available.

Didn't see it mentioned above, so I feel compelled...have you considered staying in a convent or other religious lodging? There are a large number all through out Italy, incredibly clean, and safe, most WELL under $100 USD. Stayed in 3 different ones last year, private toilet facilities, great beds, and some of the kindest staff you will ever find. Search here for many postings, or check out the book "Bed and Blessings Italy."

The Hotel Lilium is a 2-star on XX Settembre in Rome. Recently stayed for 4 nights, and loved it. Some rooms are larger than others (ask for #27 - large and airy), but it's a new hotel, very clean. Extremely polite (and English-speaking) staff. Located about a mile from Termini, and convenient to city bus lines, which was important to us. Rooms are 130 euros.

Can't remember if it was mentioned already, but the star system varies from country to country.

2 star hotels are just fine! There are many delightful properties in and around Rome that are 2 star and are great places. Albergo della Lunetta in Campo di Fiori comes to mind. It is a wonderful little 2 star hotel right in the middle of Rome and is clean, hospitable, etc. I stay there every time I go to Rome. Unless you have the budget to spend 500euro/per night for a 5 star property, there is no sense doing so if you can find equally decent accommodations elsewhere for much cheaper (and, a better experience, in my opinion).

Of course not. There might be some exception of course. One thing :most Italians hotels are very clean. I find them cleaner than in many countries and that some in the US.