Thanks to everyone who helped with our trip. Wanted to pay back with our trip report and recommendations for future travelers.
Our trip was 2 weeks long, Dec 21-Jan 3
Dec 21 - flew to Miami at night. Stayed at Courtyard by Marriott by the airport for $49 booked via Priceline bidding. They have a free shuttle from the airport.
Dec 22 - took Greyhound from Miami Airport (bus depot at concourse E) for $41 to Key West Airport, then free bus to Downtown Key West (instead of the $8 per person cab)
Stayed at Best Western Hibiscus near one end of Duval Street for around $100-120 per night. Room had a fridge and a microwave, and there is a pool. It's about a 15 minute walk to the central part of Duval with most bars. Would highly recommend Banana Cafe nearby for any meal (French place). Rick's is a happening dance place on Friday nights. Wednesdays, girls drink free 9-11pm at Cowboy Bill's. Zachary Taylor Beach is nice for $2.50 entrance fee I believe.
Dec 25 - picked up a rental car at Alamo (booked via http://www.united.com/cars for around $58 after taxes for one way to Miami Airport - cheapest we could find for that day). Drove to Miami via Morada Bay Cafe in Bayside/Islamorada area (highly recommend it! eat with your feet in the sand) and the Evergrades (we did the Anhinga trail off Royal Palm and saw tons of alligators, birds, a turtle, etc in the afternoon). Dropped off the car at Miami Airport and took the $2.35 bus #150 from Concourse E to South Beach (Washington Ave and 16th St). Tip: pay cash for the Airport bus, but get a refillable Easy card for the rest of your bus trips because other buses cost $2 and you can only add even amounts to the card. Transfers are free within 3 hours with the card only.
Dec 25-28 - stayed at Tropics Hotel & Hostel in South Beach at Collins Ave between 15th and 16th St. Perfect location. We booked 2 dorm beds in a 4-bed female dorm for 3 nights and got a private room the first night because that specific dorm wasn't available. The dorm was very simple, but nice and clean with an attached bathroom. Great hot showers. There is one computer with free internet downstairs, a kitchen, and a pool. It was a great deal for around $25 per night (10% discount on their website). It's not a party hostel and most people staying there are families and older. We shared our room with 2 nice Italian girls.
In Miami, I'd recommend:
Eating at Versailles in Littel Havana (you can take 2 buses to get there, which takes about an hour: #120 to downtown Miami and then #8 to 34th Ave)
Eating/drinking at Burger & Beer joint and going out at Purdy Lounge nearby (both non-touristy places on the west side past Alton Rd)
Not eating at News Cafe (bad service, cold and badly cooked and overcooked food)
Having breakfast or lunch at Playa Cafe (small cheap local Cuban restaurant on Washington Ave)
Dec 28 - Jan 3 - took the $2.35 Airport bus and flew to St Thomas. Shared van to Charlotte Amalie ferry terminal is $6 plus $2 per bag and takes 10 minutes. Took the ferry to Tortola (Roadtown) for $30 one way. Shared service to Cane Garden Bay is $8 per person if available and at least 3 people on the truck. Otherwise, a cab is $25.
We stayed at Rhymer's Beach Hotel, which was perfect for our needs at $117 after taxes. Rooms have a kitchenette, one queen and one twin bed, and a bathroom with a hot shower. We also had a private terrace. There is a big terrace for everyone to use as well and you get free beach towels and chairs to use. Bobby's supermarket is nearby. Myett's has good big $9 ribs appetizer.
We did a day trip to the Virgin Gorda Baths from Roadtown. Ferry costs $30 roundtrip and you can pay $8 extra for transportation to/from the baths from the ferry terminal. The tide was too high the day we were there, but we still had a good time.
For New Year's, we took the ferry from West End to Jost van Dyke for the party at Foxy's for $25 roundtrip. From Cane Garden Bay, it's $8 per person for shared transportation to West End. I'd recommend getting to the ferry early since there were only 50 people accepted at a time and it went once an hour. We got there around 8:30pm and were the last ones to get on the 9pm ferry. After that, about 200 people showed up and I'm sure some of them missed New Year's. The line to buy tickets got very long.
We met some locals on Tortola and ended up having dinner at a Jamaican family's house party, which was amazing. They cooked upa feast. And then we went uot to U.P.s in Roadtown at night with a bunch of locals. Good times.
Jan 2 - we took the ferry to St John from West End for $30 one way. We stayed in a huge brand new 2-bedroom condo for 1 night, booked via VRBO.com (Horizon Villas). The owner is a longtime local and gave us a ride up to the place. He also took us to St Thomas the next day for free since he was driving the car ferry anyway. We took it to Red Hook and then took the local open air trucks for $1-2 around the island, including to the airport (a bit of a walk off the main road).
We had a great time overall, even though the weather in Miami was freezing. Either way, hope this helps others planning a similar trip!