There's not much in Camp Verde, honestly, besides Out of Africa and the casino. I suggest staying in Prescott or Jerome. I'm not sure why 'hersheyfolks' didn't like Jerome, but I used to live in Cottonwood, and visited Jerome all the time. I personally really like the town. It's small, yes, but it's rather quirky, and fun to walk around. We have also done their annual home tour, and all of the residents are always very welcoming. You have to have an open mind, though - I think sometimes the attitude of the visitor is reflected in the attitudes of the residents.
In Jerome, the Ghost City Inn is an excellent value, and the innkeepers are very friendly. Get the Western Room or the Verde View Room. The Surgeon's House is also a nice place to stay; they have a very pretty garden area, too. I have a Traveler's List of things to do in Jerome; I'll post it below.
As for hiking, there are several good trails at the top of Mingus Mountain above Jerome, and there are also countless trails in and around Prescott. Just do a Google search for listings.
Edited: 05 July 2010, 20:15