There are two kind of hotels at the falls: The Sheraton and the rest. The Sheraton is the only hotel inside the National Park, from where you can actually walk to the falls. This is not necessarily a good thing: being so close to the falls also means being far away from the town, and many people like to experience the city as well as the park, especially for meals.

There are a few local hotels located in the road that takes you to the park that are very nice places, offering good service at lower rates. The Cataratas Hotel (www.hotelcataratas.com) is a good example, but it is not the only one. 

You may also want to stay in town. Puerto Iguazu is a nice small city offering good options for dining and going out. The Saint George hotel (www.hotelsaintgeorge.com) is a good option in the city.