Hi bigspender - For visiting Monaco, choosing the right time is important imo. Avoid special dates like F1 Grand Prix, Tennis Masters tournament, etc like the plague. Don't even think about July and August - too crowded.
Here are my recommendations for a reasonable priced accommodation when visiting Monaco.
There are two hotels within Monaco that my friends stayed several years ago when they visited.
Hotel Alexandra
(I can't remember the name of the other one . Will post when I do)
There is also Hotel Ambassador which is right next to the train station. I don't know anyone who stayed here but it looks OK from the outside.
Hotel Miramar is VERY pleasant. Right at the port, with an open air terrace overlooking the boats. Great restaurant. I have no idea about the cost of staying there, but it's worth asking about it.
There are a couple of hotels in Beausoleil, which is right above Monaco (i.e. you can be in Monaco with 5-10 steps). I will post links to them later tonight. Think of Monaco/Monte-Carlo as a VERY small neighbourhood. It has no boundaries with other neighbourhoods. So you can stay within Monaco and pay a fortune, or you can stay just outside of Monaco (literally a difference of two steps) and you can pay very reasonable prices.