Am looking to possibly stay three days in Venice before heading to Trieste to catch a cruise. I have been to both cities before, albeit over 15 years ago. At that time, I know we stayed in Venice itself, but am loathe to remember exactly where. While researching hotel in the Venice area I have seen quite a jump in prices when comparing staying actually in Venice or alternatively staying in Mestre or even Lido. Is it worth anywhere from double to three times the price to actually stay in Venice? I can think of many things to do with that extra money, such as a nice dinner, drinks at the Danieli, etc., but will I regret not staying in closer if I have to pay that extra money to get back to my hotel every night? We have all been in the situation where we stay outside of the city center, or near an airport, because the hotel was nice and cheap, only to find that we end up spending more on transport since we can't just walk or easily get around! Any and all advice is appreciated!

I stay in Mestre when I go to Venice but it is a drag to be hanging around the train station at the end of the day. If you can find something affordable on Murano or Giudecca, it might be a better compromise.

I travel often, long and very much on a budget. In the case of Venice I think there's an especially large difference between near Venice and in Venice. My compromise in the past has been to stay in Venice but in a more humble accommodation than I might ordinarily. I haven't yet stayed in a church owned hostel but very well might on my next visit. They are more expensive in Venice than in other places but I suspect somewhat better than a commercial establishment at the same price.

You can google convent or monastery accommodations to find them. There are a number of them, probably not on the Grand Canal but still in Venice proper and maybe in a nice quiet neighborhood which I prefer to a busier location.

You don't mention what price you want to pay, but I stayed at a b&b in Venice that was very reasonable and I thought it was great. It gets great reviews and was the least expensive hotel on my trip last year but was one of the best.
http://www.aitagliapietra.com/position-ENG2010.htm

Mestre is a quite unpleasant industrial suburb and nothing like Venice.

The Lido is a beach island and takes about 20 minutes across the bacino by vaporetto. I don;t like it - but better than Mestre - unless there is a congress happening. the Congress Center is on the Lido and if there is a congress you may have waits of 30 minutes or more just to get on a vaporetto to San Marco.

How much more that is worth is up to you.

I have stayed on the Lido twice for congresses but for vacations would stay on in Venice proper.

I would definitely stay in Venice rather than Mestre of one of the islands. You'll miss the magical nights of walking around or a vaporetto ride on the grand canal to see the palazzi lit up.

When I go to the city, I don't stay in Newark.

Your right, about costs, sorry about that. I have found some hotels in Mestre, like the Ibis and Holiday inn for about €50 a night. Been looking in Venice proper and am having a hard time finding anything for less than €100 for a comparable hotel, and maybe that's the problem that I should just find a small b&b, etc and get over my "chain, earn my points, mentality." I have to admit that as I have gotten older I do insist on a private room with bathroom, etc. I have to admit, been really leaning towards staying in the city for all and many more of the reasons already stated. Anyway, any other suggestions, etc would be nice and thanks for the ones already received.

We have also stayed at the B&B recommended by cls2paris and so have my parents and cousins. Their rates are about €100 a night and the service is excellent.

You can check out this b&B in Santa Elena in Venice - http://www.bbvenezia.com/pages/english.htm - still within Venice proper but not centrally located.

Haven't stayed there but was recommended.

Another vote for Ai Tagliapietra - we stayed there last year (I think on jamikins's recommendation!) and loved it. Great location, comfortable rooms, and the owner, Lorenzo, is wonderful. Staying in Venice proper would be so much better than staying away, I think - well worth the HI points you'd lose!

Hey thanks all! Have emailed them to get prices

We stayed in Sanat Elena ( not BB- hotel) and loved the place. Two stops to SM or a short walk.