Hostels provide simple, budget accommodation primarily in shared rooms. They are good places to get to know other travellers. In Germany, as in many countries, two flavors exist: international youth hostels and independent hostels.
International Youth Hostels "Jugendherbergen" are owned and run by the association "Deutsches Jugendherbergswerk" DJH, which is part of the Hostelling International HI network. There are more than 600 hostels spread all over Germany in big and small cities as well as in the country side. Not only individual travellers are guests but also school classes and other youth groups. To sleep there, you have to be or become a member in a youth hostel organisation belonging the HI network (http://www.hihostels.com). Detailed information about this and each of their hostels can be found on the DJH's (http://www.jugendherberge...). Generally, this entails simply filling out a card and payng a few extra Euro per night. In general, the advantage of these places is that they tend to serve a buffet style breakfast for no additional charge, though this is not an absolute rule. However, the quality is often below that of private hostels, and many do not provide a good opportunity for socializing.
Privately run independent hostels are starting to be an attractive alternative for a similar price. More than 60 already exist in Germany, getting more and more every year. They are located in bigger cities, especially in Berlin, Munich, Dresden, and Hamburg. Only few are in the country side. Sometimes run by former travellers, hostels refrain from having strict rules. Especially small ones are frequently places where you can feel at home. Many are known for their vibrant, party atmosphere and can be an excellent way to meet other travelers. There is no need to be a member in some organisation to sleep there. About half of the hostels have organized themselves in a "Backpacker Network" (http://www.backpacker-net...), which provides a list of their members hostels. A website which lists almost every independent hostel in Germany is Gomio (http://www.gomio.com/). Of course, international room booking agencies such as Hostelworld and Hostelbookers are also good resources, and give travelers the ability to leave reviews.
Most international hotel chains have franchises in the major German cities, and a large variety of local hotels exist. All hotels in Germany are ranked by stars 1 to 5 stars. The rankings are made independently and are therefore reliable. The rate always includes VAT, is usually per room and includes in most places breakfast. Prices vary significantly by city Munich and Frankfurt are most expensive. A cheap and convenient way to stay are Ibis Hotels (http://www.ibishotel.com), usually located near major railway stations. For people who travel by car, Etap (http://www.etaphotel.com/...) hotels located at the outskirts of cities near autobahns offer rates that can compete with hostel prices; though those hotels are not necessarily better and they lack the individuality hostels are renowned for.
There are countless campsites in Germany. They vary significantly in the infrastructure and standard. The ADAC, the German automobile club, offers an excellent guide for most German camping groups. If you are member of your national motorclub assistance and guides are free or at substantial reduced prices.
Some travellers just put up their tents somewhere in the country side. In Germany this is illegal, unless you have the landowner's permission. Practically however nobody cares as long as you are discreet, stay for one night only and take your trash with you. Be aware of hunting ranges and military practise grounds or you could be in significant danger of being shot.