The city of Munich has a very good offer of places to stay. From upscale 5-star hotels to basic hostels for backpackers, every visitor will find a place to stay that suits his needs. Prices are not cheap, though. Munich is one of the most expensive cities in Germany, after all.
The best area to stay is the Altstadt (Old town), but thanks to Munich's good network of public transport, any area is good. Just make sure your hotel is close to a metro station, or to a tram. By the way, trams are the best way of moving around outside the Old Town.