Overview
There are around 30 mainstream hotels at Heathrow. Most of these are large chain hotels with most of the major brand names represented. Some chains have more than one hotel, Holiday Inn (3), Marriott (2), Sheraton (2), Travelodge (2) and Premier inn (2).
All these are depicted on a Heathrow Hotel Map (alternative Heathrow map here) . 

Location
The Hilton (terminal 4) and the Sofitel (terminal 5) are the only hotels actually connected to the airport. The Sofitel is the most expensive hotel at the airport with suites costing up to £4,000. There are no hotels that can be walked to within a reasonable distance (though its possible for the Bath Road hotels like the Renaissance at 0.7 miles)  from Terminals 1,2 and 3. Most other hotels in the vicinity are connected by transfer bus to the central area where terminals 1,2 and 3 are and also to terminal 5.

Along the northern perimeter of the airport is the Bath Road, this is the main hotel strip and overall the best place to stay, as will become apparent. These hotels are physically the closest to the central passenger terminals. This is one area where you can escape the expensive hotel for food, drink and entertainment.

The hotels here are the Holiday Inn Ariel, Holiday Inn (Bath Road) , Park Inn, Radisson Edwardian, Renaissance, Marriott, and Sheraton Skyline. There is a small supermarket and an Italian Restaurant adjacent to the Park Inn and a pub doing steaks etc opposite. A McDonalds is sited next to the Radisson. The Pheasant Pub an eight minute walk north along New Road near the Radisson Edwardian has excellent food.    There are very frequent red London buses running past these hotels, some routes running a 24x7 service into neighbouring towns where much greater choice is available.

Further along the Bath Road are the Ibis, Premier Travel Inn (East) and Travelodge Heathrow Central. These have a ten pin bowling alley and another McDonalds nearby again with frequent buses.

By the junction of the airport motorway spur is a cluster of isolated hotels. If you want to get away from the hotel it is a bit of an effort. These are the Novotel, Crown Plaza, Holiday Inn (M4 Junction) and Premier Travel Inn (M4 Junction).

Jurys Inn is very isolated sited by the British Airways maintenance area. But if you want to go into Central London it is right next to Hatton Cross Underground Station with Central London only 40 minutes away and it is also close to bus stops connecting the other areas of the airport..

West of the airport, strung along the Bath Road, are the Sheraton Park, Thistle, Quality Inn and Marriott Heathrow/Windsor (actually this part of the A4 is called London Road). Ten minutes walk will bring you the the pubs and restaurants of Longford or Langley. There is a McDonalds opposite the Sheraton. There is also a bus service passing close to all these hotels running to Windsor every 30 minutes, one hour on Sundays. Its about a 30 minute ride to the castle.

Hotel Transfers
The airport authority has banned hotels operating commercial complementary hotel shuttle buses (or simply charges bus companies uneconomical fees to use the airport). Instead there is a monopoly bus service called Hoppa Bus . There are many Hoppa Bus routes, each of which connects 3 or 4 hotels on a fixed route. Note that some hotels are not on routes with direct connections to every terminal, so check the timetable carefully.

, the Heathrow Connect train shuttles every 15 minutes (free of charge) between the central area (Terminals 1,2 and 3) and Terminal 4
Frequencies are commonly every 10-15 minutes on each route, broadly operating from about 05:15 to 23:30 . Some of the more outlying hotels like the Comfort Inn, Quality Inn and Marriott Slough/Windsor are slightly less frequent.

The Hoppa Bus service is not cheap, the adult fare being £4.50 each way, or £4.00 if you book in advance.

If you have a hotel on the Bath Road, you can use free public buses into the central area. These are normal red London buses. These are free because the airport authority subsidises the cost. The airport authority has a free bus route map that depicts the free bus area with hotels clearly marked. There are bus stops in front of all the hotels along the Bath Road. East of Heathrow’s entrance tunnel these buses operate a 24x7 service.  Apart from being free these buses are more frequent than the Hoppa Buses and several routes run a 24x7 service. The red London buses are low rider entry which  provides  easy access and room  for luggage  . They run from the airport central bus station and buses for Bath road are numbers 285 from stop 20 or bus 105 from stop 19 . A saving of  £9 per return trip makes the free red London  buses an atractive option .

Price & Value for Money
The bread and butter of most Heathrow hotels are businessmen. As a result, room rates are commonly 30-50% cheaper on a Friday, Saturday or Sunday night.

At the weekend all the hotels will heavily discount and for just a few more pounds you can often substitute a 2 or 3 star for something much more luxurious. The budget hotels like Holiday Inn, Ibis. Premier Travel Inn and Comfort Inn are normally discounted down to around £50 or less at this time. Often deals like free breakfasts become available. You should not pay more than £100 at the weekend at any hotel.

During the week, prices range from about £40 to nearly £200 for a double/twin.

In terms of price and reputation the best/most expensive hotels are the Hilyon and Sofitel attached to Terminals 4 & 5. Of the other 4/5 star  airport hotels Radisson Edwardian, Marriott (Bath Road), Crowne Plaza and Renaissance are best for facilities. All these hotels are heavily used for conferences and corporate gatherings

Cheaper 4 stars are the Sheraton Park and Park Inn offering a similar product to their clones all over the world.

Below this level in price and stars are the Holiday Inns, Thistle, Novotel, Premier Travel Inn and Jurys Inn hotels.

The cheapest no frills budget hotels are the Travelodge T5, Travelodge Central, easyHotel, Ibis, Quality Inn and Comfort Inn.
Room rates at the 4 star hotels can often seem a loss leader, the incidentals can often add up to more than the cost of the room. Using the Hoppa Bus for transfers adds £8 return per person and food and drink can be very expensive, especially at the more isolated hotels where you have little choice. Breakfast can range from £5 to over £20 depending on the hotel.

As previously stated you will probably get the best value staying on the Bath Road where there is some level of choice and of course cheap public transport into the airport and beyond. 

Hotel Consolidators 
Consolidators are companies that buy up blocks of rooms at Heathrow hotels in advance and sell them on at very low prices. Prices are very dynamic but normally offer the cheapest rates.
Priceline and HolidayExtras normally have the lowest prices. The Priceline bidding model probably offers the cheapest headline room rates though you do not choose the hotel, Your hotel is allocated after a successful bid, The danger of using  Priceline.com  at Heathrow is if you are allocated one of the more remote hotels. As stated in the above paragraph the cost of all the extras like transfers to the passenger terminals, food and drink can be well in excess of the room rate.

Holiday Extras is a UK consolidator that take allocations of rooms at all of the hotels. Holiday Extras have mystery hotels like Priceline but also show prices for all of Heathrow's hotels at consolidator rates. All their prices have a best price guarantee and it’s a simple way of seeing all the prices for all of the hotels at Heathrow on one screen.

Another option is to use a comparison website that compares a selection of consolidators. Airport-Hotels.co.uk compares 4 such consolidators Holiday Extras, APH, FHR and Superbreak. They focus on accommodation with airport parking packages but do offer an accommodation only search function too. So at a glance you can see who is offering the same heathrow hotel for the cheapest price, then it links directly to the consolidator for you to buy direct.The prices shown include flexible and non flexible rates.

You can of course go direct to each hotel chain. Always check that VAT is included, as rates at sites like Hilton and Holiday Inn are sometimes shown given exclusive of local taxes.

Most web sites offering hotels at Heathrow are just agents or affilliates of a few major room providers. You may not get the low prices of the consolidators but you can often get discounted flexible rates that you can subsequently cancel without financial penalty, something you cannot do with the consolidators. The main providers of such rooms are Superbreak, Booking.Com (now incorporating Active Hotels), Hotels.Com and Expedia.  Most other sites are affilliates or sub agents of these.

Day rooms are available at most hotels if pressed. The Hilton, Novotel, Thistle, Sheraton and Ibis span the price range and have better availability than most.  At Termimal 4 is also the Yotel, that rents out very small 'cabins' by the hour.

Bed and Breakfast
There are other options to the mainstream hotels.

Small Bed and Breakfast hotels offer the promise of cheaper accommodation, though at the weekend there is little difference to the budget hotels like Comfort Inn and Ibis.

Cheapest is probably the Heathrow Lodge in Longford, a small village near Heathrow. The big bonus here is a complementary terminal shuttle, including terminal 4. The very cheapest rooms have shared bathrooms. easyHotel Heathrow is similarly priced to the Heathrow Lodge.

If you are looking not at price but personal attention and quality, the Cottage Guest House addresses this market. The 105 bus runs a 24x7 service to Heathrow from close by the Cottage Guest House.