We will be spending 2 nights in Zurich mid October. Any suggestions of the best area/hotel to stay in? We want to be really central with train, restaurants etc within easy walking distance. Is the Old Town a nice area to stay? We would like to keep it under 100euros a night if possible.
Any ideas?.....

Old Town Zurich is the preferred area in which to stay. Sorry I can't help with hotel in that price range. Just so you know... Zurich (all of Switzerland) is a bit more expensive than the rest of Europe, and Switzerland's currency is the Swiss Franc not the Euro.

If your schedule is still fluid, try to stay in Zurich on the weekend. Since it's primarily a business town, you can get good cut rates on the weekend.

Zurich is pretty pricey, whatever part of town you select. Old Townis OK. I liked staying in the area fairly near the train station (Hauptbahnhof.) I did a quick check on www.all-hotels-world.com and saw a few places in your price range, but the lowest rates were outside town. venere.com seemed to have much higher rates.

Consider:

http://www.martahaus.ch/en/
Double/ensuite - 150-160ch/<$115>
Double/not ensuite - 98-114ch/ <$85>

http://www.hotel-alexander.ch/
Double/ensuite - 140-210ch/ <$100-150>

http://www.st-josef.ch/
Double/ensuite - 185ch/<$140>
Double/not ensuite - 135ch/ <$101>

http://linktrim.com/2si
(Hotel Arlette)
Double/ensuite - 10ch/ <$115>

I highly recommend the Hotel St Josef. It is immaculate. Breakfast is included and it is wonderful. The hotel is located about 4 blocks from the main train station. You will not be disappointed! I stay there twice a year. My last visit was on June 7th, 2005. The total for 1 night charged to my credit card was $107.21 for a twin room with toilet and shower just outside our door.(very, very clean)www.st-josef.ch

If you like cows, stay at the Leoneck (major cow theme decor complete with cow tiles in the shower). It is a couple of blocks from the Baunhof (albeit up a rather steep hill) and is also within easy walking distance of the old bit. We stay there around once a year, as they do great triples. Should be in your price range.

We stayed at the Leoneck, which is a nice inexpensive (for Zurich) hotel but our twin cost equiv. $140, so that is over the OP's requested price.

Thank you everyone for all of your help, it's much appreciated.
Thanks Scatcat for your recommendation of Hotel St Josef. It looks lovely! I think we will stay there!!

Just stayed at the Alexander. Great area, handy to everything, a little more than the $100 a nite...but well worth it. Nice staff too, they were very helpful to me re: day trips etc.

Recommend that in Zurich you buy the 24h or 48h train pass, which enables incredible reductions and freebies on tours, etc. Hotels sell them.