We are on a Oceania Cruise (Venice to Rome) end of May 08... on the back end we are staying 3 nights in Rome. We booked the River Palace Hotel in Rome (3 star) as it is very close to the Spanish Steps and other attractions. Rooms are on the smaller side, but overall from what I have read, it is a very good hotel (we booked it thru NWA World Vacations at a discount lower than web or Expedia).
By the way, we are staying at the Hilton Rome Airport Hotel the night before our flight back to the USA as we have a 6:15 a.m. flight (ugh). Take care that if you have an early flight home, stay at the airport... and be aware of other hotels that are selling themselves as "at the airport" as the previous one we booked said that and was a 1/2 hour drive away (tripadvisor.com). The Hilton is the only one that is attached to the airport.