This is the launching point point for trips to the famed Machu Picchu and is therefore possibly the most densely touristed spot in Peru (although that's speculation at this point in time; I've only been here a few days). It's a cute place though, plenty of cobblestones, colonial architecture, scenic mountains and plazas, so it'd be worth visiting even if there was no Machu Picchu.
Travel by land is possible but time consuming (22 hours from Lima over very windy terrain) making the flight in an attractive option; avoid LAN Airlines at all costs, due to their policy of massively overcharging foreigners. Peruvian Airlines and StarPeru were both able to do flights for about US$87 one way, even booking the day before in high season. The scenery on the flight is also spectacular, so book early and do an early check in to select your window seats near the front of the plane to get the most out of it. It's all far more appealing than 22 hours on a bus. Another option is to break up the trip via Pisco and other southern destination, but you're still looking at several 10+ hour trips, and in our case we'll be coming back up that way anyway on our return from the south.
Hostels and hotels abound in Cusco and I can't imagine it would ever be a problem to find anything outside of high season. Even now it would be no problem if you're willing to settle for a dorm... Prices are cheaper than Lima, in general, although the chains that have hostels spread across multiple cities to try to charge more (in general).
There are plenty of ruins and other sites to see in and around Cusco. Unfortunately the local authorities have screwed things up by forcing you to buy a collective ticket to many sites, without offering the option to only buy one or two. Having a discount for many sites is a good idea, but if you don't want to visit many of them it means you have to pay a huge price for just the one or two you do want... or you just don't go.