Good summary by easytraveler, except there's a minimum bid. You can't bid $1 for a hotel.

The minimums are:
1* $15
2* $17
2.5* $19
3* $25
4* $40
5* $55
Resort $40
Boutique $50

rkkwan: Thanks for the correction!

Guess the rules have changed since I first learnt to bid on Priceline!

Just did two days in SF at the Sheraton Fish/Wharf for $95/day thru P'line.

The usual Sheraton nice room, excellent service and great location for the beginning and end of the event we were attending at The Aquatic Park.

Knock wood for another good experience thru P'line.

.....bookmarking.

Another satisfied P'line bidder here. I've had very good luck with them in London, as others have, and had a very good experience with a Priceline hotel in Edinburgh last month. I've also done very well with cars - my lowest accepted bid was $7/day for a compact at Hertz Sea-Tac airport. :)