"Cheap hotels" depends a bit on your standards. There are a number of motels - a little bit, mmm.... well, rudimentary especially along University Ave. that are the least expensive stays in town. I've stayed in them, multiple times, and found them satisfactory for the budget. If you want quality, there's several options easily found via web searching but that will cost you (last I checked) about 3x as much.
Restaurants: Well, it's tempting to rant about my favorites but basically there is a huge spectrum here of price and quality and at any point in that spectrum it's hard to go wrong. I suggest, if you have the time, walk around downtown, around Telegraph, perhaps further west. It's basically hard to go too terribly wrong if you use some common sense. If you like fine beer, I'd suggest Triple Rock. If you like fine dining (and dropping some serious money), the cliche recommendation is Chez Panisse but there are tons of other options.
Transportation (what airport?) there are shuttles that are the best bang for buck. Again: web search. Cabs will soak you but are also more convenient and sometimes you have interesting conversations.
BART will help if you are coming from SFO. If you are coming from OAK you need a bus or taxi to BART but BART can deposit you dead center downtown. ("BART" has nothing to do with the cartoons - it's "Bay Area Rapid Transit" and there's a very long (and ongoing) story behind it.) See bart.gov.
Also see http://511.org/
See you there.
-t