Thanks for suggestions! I booked into the Majestic Station Hotel this morning. Nice enough place with some discounted rooms. 88RM more than I'd normally spend, but worth it! Just came from Taiping, which is a lovely town with lots of green bits, colonial buildings and old shop houses. Good atmosphere and lots of rain. For hotels there, the budget hotels (30RM) looked a bit depressing inside. Stayed in Fuyirean 55RM, which was ok. New Champagne for same price perhaps better. Peking Hotel, not far from bus station, was offering discounts at 40RM - worth a look. And there's that old hotel, I forget the name, near the clubhouse overlooking the park, big rooms 69RM, but would discount 57RM for 2 or more nights. Panorama was offering 72RM which is probably good, but I didn't look at rooms.

For anyone else reading this thread, I agree that Taiping is definitely worth a visit. I stayed in Hotel Lagenda for RM80 a double with a/c and private bathroom and friendly management.

Agree. Taiping is perhaps the best kept secret along KL-Penang route.
James, if you catch this, try making your way to Maxwell Hill (locals call Bukit Larut) foothill at about 4pm. Lots of local jungle hikers doing the Gunung Hijau trail for exercise, 2-3 hrs journey through steeps and fabulous rainforest. Tag along. Most can speak English and friendly. A few years back, we made our way there and trailed a 60 year old man. Great conversation and rare scenery.

Just as a Post Script I'll add: my second visit to the Tanah Rata - I didn't like it much the first time, and don't like it now. It's a tourist town, and I miss having friendly to dos with the locals who in this case are mostly there to deal with the tourists; the welcome a lot less friendly than other towns, food not so good, the weather awful unless you're desperate to escape tropical heat. I left ASAP to travel on to one-horse town Gua Musang which I enjoyed much more. Cameron Highlands will probably suit backpackers who want to meet other backpackers in the guesthouse, or those who are desperately interested in butterflies and cream teas... but what do I know - I'm sure some of you will love it.