I am intending to travel to Thessaloniki at the end of October (22-28.10). The Lonely Planet guidebook on Greece warns about problems with accommodation. Is it really that bad?. Any suggestion are welcome.

I'm not sure what kind of problems you'd encounter. I have heard that there is a lack of good hostels in town, so maybe that's what they're talking about. The city also hosts some conventions, so that could impact things. (Though I don't think it would impact backpacker-style accommodations much.)
I stayed at the Hotel Atlas, which was a low-budget hotel but pretty clean. I just showed up without a reservation, and happened upon the hotel. It's located on the main drag (Ignatia? Egnatia?) from the train station to the center of town, and there seemed to be a ton of similar type places.
See this recent thread.
Dave

Thanks Dave. There are various festivities at the end of October and the supply of accommodation is at the very low level
e_q

There are 2 major festivals in Thessaloniki which take place towards the last quarter of the year-
Helexpo, the int'l trade fair [it ended mid Sept] and the film festival [to begin mid Nov]. I can't think of anything else happening at this time. However, Thessaloniki is always host to various seminars and incentives, and it doesn't have a major number of hotels [or very large complex hotels] in general.