We spent all of our time in China (and plan to spend most of our time in India) staying in 'youth' hostels. (as we will perhaps elaborate on in a later post, it's not really just youths who stay at youth hostels, and we met lots of interesting fellow travelers in hostels so far.) We normally stay in more expensive accommodation, but since this is such a long trip we wanted to try to do it on the cheap. On average we paid about $22 a night for a private room for two people with a private bathroom. Dormitory housing with shared bathrooms is ridiculously cheap (a few bucks a night), but we figured for such a low price it was worth springing for privacy.
In Europe we have a little experience in hostels, and it's been hit or miss. In China we were overwhelmingly impressed by the quality of hostels. They were all very clean. It tends to be mostly westerners that stay at them (or at least at the ones recommended in lonely planet), so most of the staff speak at least a little English. They were very helpful and were able to arrange events and transportation (plane, train, bus) and also recommend and make reservations at other hostels for our later destinations. We could have gotten by without their help, but it would have been much harder since so few people in China speak good English.
Many of the smaller hostels seem to be run by families who live at the hostel, which is quite interesting to observe. In the main room where the computers are (for patron use), there's sometimes a TV that they all sit around and watch. You can get a view of the family dynamic, including loud yelling between the husband and wife in Chinese.
The one downside is that often the rooms are fairly small. The trickiest thing has been the bathrooms. Usually they are clean, but if you've ever been at sea, they resemble the head in a tiny cabin. Excepting some of the nicer hostels we stayed at, usually the entire bathroom IS the shower, so as you shower you spray the sink, the toilet, and the entire bathroom floor with shower water. There's a drain that everything drains into in the middle of the bathroom. Maybe I'm a spoiled American, but I like an isolated shower container that I can stick my caboose into while showering so that 30 minutes later I'm not galoshing around a still wet bathroom floor when I have to use the toilet or the sink again. It seems like a good way to spread fungus. Luckily, we brought bathroom flipflops.
(note from marisa:) The biggest plus for staying in hostels is the advice you get from fellow travellers. You always meet someone who has been to the places you are considering going, can tell you which hostel to stay at, how long to stay there, and what types of scams to watch out for. We managed our last 1.5 week in China planning everything at the last minute, relying largely on advice from others. We also got a ton of advice on how to prepare for India - India appears to be a mandatory stop for any long-term traveller, and it feels like everyone has been there. It was based on traveller advice that we decided to hire a driver in Rajasthan - train stations are the single place you're most likely to be scammed, drivers are cheap to americans (about $50/day), and you can see more faster. Having a driver makes me feel extremely lame/incompetent since my parents journeyed all the way from Europe to India over land on their own in their youth, where someone tried to by my mom for a camel (or was it a horse), which my dad could have conveniently used to get the rest of the way to India. However I'm consoled by the fact that we've met several hard core, long term travellers that go with drivers.