Like most others here I'd stay in Venice for the entire period. There's plenty to see and do, and you can always visit Florence on your next trip.

As for budget accomodations, B & B Al Saor in Cannareggio has double rooms for 90 euro per night, breakfast included. I stayed there in September of 2005 and was very happy with it: nicely renovated, pleasant staff, immaculately clean.

I agree with Ira, take a day trip into Florence, just be sure to research what you wish to see in Florence so you don't waste any time.

For other posters, some people want to travel to these cities to see the Uffizi, the David, the Duomo or something. For those type of travelers, me included, it is always worth taking that extra trip.

Just my two cents worth.

Thanks everybody, for all of your suggestions. You guys are great! I've been looking at all of the suggested hotels and they all look like possible options. I'll continue to watch the forums and if anyone has any more information, let me know!

Kim