Playa del Carmen
Playa is a great option for those who want a slightly cheaper, less hectic option to Cancun. About 45 minutes south of Cancun, Playa is a fun metropolitan city with great restaurants and a gorgeous beach flanking it to the east.  Quinta Avenida, which parallels the beach has lots of great restaurants and bars.  At night everyone spills out on the street for what amounts to a big block party. Accommodations pretty much run the gammett.
There are many hostels available at very reasonable rates. We stayed in the Hotel Colorado (we think?) and it was clean and comfortable.
It's probably best to search sites like to find deals on hotels in this area.

This is a little on the high end, but good deals can be found: