please recommend a reasonably priced hotel in Quito's old/historic part of the city, I understand it is a must see part of Quito and I'd like to stay there, thanks.

I am staying in Chicago hostel, betweeb the new and old town (10 minute walk top either of them). Los Rios 1730 is the adress. Clean and friendly people...
Take care
Gerrit

The Secret Garden is a great place to stay on Jose Antepara close to Los Rios and has great night views fom their balcony.
They´re on the internet somewhere. But if you want to go out it is easier to stay in the Mariscal rather than take a cab from the old town (which is only 5 minutes) but a pain and adds more to your budget. There are plenty of hostels in the Mariscal.

I felt the same way too. I stayed at the Hotel Real Audiencia. It is just off the Plaza of Santa Domingo. If you ask for a room with a window you can get a nice view of the church lit up at night. I paid $26 for a single with a bath. Nice place.