We stayed for 5 nights at the Campanile - excellent location just a stone's throw from the old town square, much closer than several more expensive hotels in the city. We paid about £40 per night, the room was large and clean, staff were friendly if a little reserved, and the only problem we had was one we've seen from other reviews: although we had paid for breakfast as part of the room rate, the staff insisted on Day 2 that we hadn't. When we produced the document confirming this they quickly apologised, but on Day 4 it happened again! In fairness, they again backed down, and we were not charged on departure. Incidentally, if you do decide to take breakfast as an add-on, I don't think its worth 8 Euros, and there are plenty of alternatives nearby. Do take your booking confirmation in case of confusion.
Otherwise the city is wonderful: castle and river / bridges are probably not up to Prague standards, but then where is? However, the rest of the old town is very impressive, with some wonderful buildings and countless excellent bars and restaurants: try the beer at CK Brovars' - the wheat beer is superb.
Trip to Auschwitz and Birkenau was excellent if sobering - we booked through the Tourist Information office and the full day including mini-bus transfers cost around £20 each. You could possibly do it for less, but we thought it was good value.
Travelled via Central Wings, flights on time and service very good. Booked the transfers through Krakow Shuttle - same good service there.
All in all a really good few days, and we would thoroughly recommend both the city and the hotel: we will certainly return in the future.

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