Ah New York New York. Wonderful place and wonderful people. I long to go back there.
There are tons of hotels around Times Square and I must say that unless you pay mega bucks, you'll be surprised at the small area of your room. It's never bothered me though because it's NEW YORK! as BUTTERHEAD1 mentions though, not all are great and I recall one place where well lets just say the nocturnal noises were hard to ignore whilst trying to sleep.
Be kinda careful with the cabs too ;) only ever official ones and even then you'll get more than the odd one who will milk the tourist dollars. I particularly enjoyed the one who couldn't find the empire state building yeah right SURE.
I could spend months just staring at the window and watching the people go by and being a night person I loved walking round. Everyone told me it would be dangerous but, and perhaps it was my inexperience, I felt fine walking about NYC at night. Granted I wasn't going far off the beaten track though.
Just a great place, love it love it love it.