can anyone recommend affordable,comfortable lodging in these two towns for a stay in July? My initial searches have only brought up wildly expensive hotels. We are not looking for low end places but don't seem to be able to afford what I've seen so far.

I Bellagio I suggest Hotel Belvedere for fabulous views or Hotel Florence near the boat dock.
I suggest you forget Portofino and stay 3 km from there at Santa Margherita for better value and more to do. Try Hotel Jolanda or Hotel Laurin.

thanks Bob...you were right last year about the villa cheta in Maratea, so i am confident in your recommendations this year! We have a week to spend on the road departing from Rome and ending up at a villa in Tuscany where we will spend the second week with friends. My initial idea is to head north out of Rome up the coast ( Portofino being a stopover...but now will look closer at Santa Margherita) with Bellagio being our northernmost destination. Then head back toward the villa which is about 20 minutes outside of Florence. Any other tips on venues, sights, accomodations, etc??

We visited Portofino as a day-trip from Santa Margherita Ligure. Portofino is very small and very expensive, and we were glad we were staying at SML. It's an easy bus trip to Portofino, and also a nice ferry ride to Portofino and beyond. I wrote a detailed trip report on our three-night stay there: http://www.fodors.com/forums/threads...p;tid=34817303

We enjoyed the little Nuova Riviera very much: www.nuovariviera.com
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thanks Maureen, your trip report is a big help and very insightful. Any tips from anyone on a great place to overnight for a day or two between Rome and Santa Margherita...to break up the drive?

Glad I could help. I also wrote detailed trip reports on Florence and Rome, in case you need restaurant and hotel recs. there.
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If you have a car consider staying in Menaggio rather than Bellagio. It is on the west shore opposite Bellagio and a good option with a car. Look at Grand Hotel Menaggio right at the boat dock.

For Bellagio, try Il Perlo Panorama:
http://www.ilperlo.com/home/en/index.php

Santa Margherita Ligure makes a better base because it's on the train line. Easy daytrips are north to Camogli or Genoa, south to the Cinque Terre. Also cheaper hotels and restaurants in SML.