Let me preface this section with the following advise, "Book early!" Hotels for Fest time can be full 9 months or more in advance. I don't recommend waiting longer than January to book for the upcoming fest. OK, on to where to stay...
Hotels in Germany follow one simple rule....clean. The difference you pay between a three, four or five-star hotel will be the amenities offered and the size of the room. I personally do not recommend anything below a three-star. Also, hotel rooms in Germany and Europe are a little different than in the US and some other countries. The room rate is dependent on how many people will be sleeping in it. A single room or Einzelzimmer is going to have a small bed, only big enough for one person. Couples need to be aware that they will need a Doppelzimmer. These 'double rooms' however may not have a queen-size mattress and may instead have two twins pushed together or in the same frame. Yes, there will be a small gap between them!
I have stayed in Munich during Oktoberfest many times the last few years and can tell you that I have paid between 79 Euro's (about $97.00) and 210 Euro's ($259.00) per night. While the latter may seem a rather high price, as a business man who travels the U.S. frequently I can tell you that I find it to be relatively inexpensive. This 'is' remember, during Munich's festival time.
Where to stay in proximity to the fest grounds is, of course, a personal decision. I know people who stay out of town several train stops and those who stay literally yards from the Wiesn entrance! My personal preference has been to stay within a few blocks of the Main Train Station. (Hauptbahnhof) I find this to be convenient for a variety of reasons:
Check out different Hotels in Munich's city center at this site. Hotels in that area are the closest to the Oktoberfest grounds. If you want to see other areas of Munich, go here. I can recommend three hotels personally. They are all very close to the train station and have very friendly staff members. They are: The Hotel Amba, The Hotel Stachus and the Hotel Excelsior