We believe that we need to stay at both places, that they are not as close as they look on the map. Is this the case? Any recommendations on lodging? We are on a fairly mid-range to low budget and love the rustic and eco-feeling in a place.
Thank you... you have all been so helpful!

You are correct they are 3 hours or so apart

www.desafiocostarica.com Jeep Boat Jeep

or rental car around the lake...

www.hotellindavista.com good value

www.hotelbelmar.net for Monteverde

Have fun,

We liked Arenal Paraiso, reasonable rates, also has thermal springs on the property if you don't want to go to Eco-Termales, offers zipline/canopy tours, horseback riding in addition to good birding.

At MV, Arco Iris is right in Santa Elena, but a bit hidden, large property on a hill next to MV Orchid Garden. Great cabins, white faced capuchins in the trees, easy walk to restaurants, must drive or cab to the reserves. Make sure to visit the Hummingbird Gallery right next to MV reserve. We saw 8 species in 30 minutes. You should hire guides at all the reserves for maximum birding and wildlife spotting.

Arenal Observatory Lodge is cheap and offers great viewa of the Volcano.

I'd go Arenal Observatory Lodge or Silencio del Campo in Arenal. And in Monteverde, we liked Fonda Vela. Definitely agree you should stay in both places, can't easily day trip - the road is long and bumpy. We used the Jeep Boat Jeep.

We stayed at El Sapo Dorado in MV. The rustic cabins are spread out along a mountainside. They have a nice restaurant with breakfast included. I wouldn't recommend this to anyone who has difficulty walking uphill.

In Arenal we enjoyed Silencio del Campo. The cabins are roomy with large windows. Their little open air restaurant served good meals and the breakfast is included. They also have their own thermal pool plus a regular swimming pool. The grounds are beautiful. There is a wonderful view of the volcano, but not the active side.

I recommend the Observatory Lodge in Arenal; incredible views, lovely grounds, nice restaurant overlooking the volcano, plus beautiful pool/hot tub.
For Monteverde, look up Cabinas Pinos http://www.lospinos.net/index.php
wonderful grounds, great owners, terrific location (walk to town, avoid the noise). The prices are also great (tripadvisor also rates them very highly).

I highly recommend the Arenal Observatory Lodge. Right now you can only see lava from there and the Lost Iguana hotel. We stayed at AOL and the view was spectacular. Really amazing to sit in your room and see lava and hear the rumbling.

In Monteverde we stayed at the Rustic Lodge in Santa Elena. It is really rustic (all furniture is carved from trees), and the two brothers who own it are super nice and helpful. They booked all our tours for us when we got there and we have no complaints! It's really more of a bed & breakfast than a hotel. And extremely reasonably priced. Highly recommend it.

We stayed at Volcano Lodge & Gardens in Arenal, great breakfast included, nice room, beautiful grounds: http://www.volcanolodge.com/
The Expedia.com had the best price when I booked.

Another vote for Arenal Observatory Lodge! Can't beat the views--night tours were coming up to the hotel patio for lava viewing and we could just watch from our private balcony!

In Monteverde we stayed at El Sol and it sounds like it might be up your alley. A bit outside town (maybe a 15 minute bumpy drive) but we had this adorable little cabin and the owner Elisabeth took great care of us. There are only three cabins I think on this huge expanse of land. Definitely felt like we were in the middle of nowhere--in a good way.

Info and pics in our Costa Rica post at http://patrinadoestheglobe.blogspot.com/