There is a wide range of accommodation in Ethiopia. There is a luxurious Sheraton hotel in Addis Ababa. You can also find a "hotel" that is nothing more than a small room with a tiny bed, and no running water, in the border town of Moyale.
Staying in tourist areas generally results in a broader range of choices, but watch out for tourist prices. It is acceptable to bargain with the hotel owner, for they usually tend to charge you "faranji" foreigner prices at first, which are often twenty times the local rate. You won't be able to bargain down to local prices close to nothing but you can bargain down a lot. This is not true at the government run "Ghion" chain, and the fancier private chains as well, where prices for foreigners are fixed. Bekale Mola, for example.
Addis: Addis is full of cheap hotels. Most tourists stay in the piazza area, where there are many hotels ranging from very cheap to moderately cheap. Except for the cheapest, most of them have running hot water, and are fairly clean. Park Hotel starts at 20 birr a single and 30 birr a double. Two big ones are Taitu hotel and Wutma hotel.
The two biggest hotels in Addis are the Sheraton, referred to by expats as "The Sheza", and the Hilton. Both are enormous and very expensive. Both have swimming pools, good restaurants, souvenir shops and bakeries: the rooms are comfortable. If you cannot afford these two hotels, visit them and chat up the expats especially at lunch time when they take their break by the pool and if your accommodation needs to be improved, they might be able to help out. You might also catch a glimpse of a rich or famous celebrity or high powered world politician, who is in Addis to do some charity work or to deal with some sort of African politics.
To escape from the busy capital, many foreign residents escape now in the weekend to Debre Zeit, at only 50km. With 7 crater lakes and a nice climate, by which you can sit outside, day and night, the whole year, Debre Zeit gets the place to be. The new highway from the Addis will link Debre Zeit in 25 minutes. Most scenic are Babogaya Lake and the Green crater Lake. At Babogaya Lake, Viewpoint Lodge offers an amazing view, very good value, and the lake water is used for swimming by many people. Green crater lake, behind the militairy airport, offers a deep hole of 150m, in which you can go down.
In the north, in every city Axum, Lalibella, Bahir Dar, Gondar one can find hotels, from overpriced ones such as the government-run Ghion chain hotels to cheaper ones. Smaller places on the major roads offer cheap places if you do not mind the most basic rooms. A tourist town like Debark that serves for trekking the Simien Mountains also offers a range of rooms, with the most popular being the Simien Park Hotel 25/30 birr, where you could also pitch a tent for 20. It meets the normal standards for food, electricity, water, cleanliness and hygiene.
In the south, all the cities Shashemane, Wondo Genet, Awasa, Arba Minch, Jinka... have decent, cheap hotels. The most basic rooms start at 15 birr for a single and 20 birr for a double. Many of them don't have hot water and electricity all hours of the day, so you should schedule time for a shower in advance. There are also three fairly expensive resort hotels on the shore of Lake Langano. In the smaller villages in and around the Omo valley Weyto, Turmi, Key Afar, Dimeka, Konso, etc. there are usually few very basic or no hotels, but if you are travelling through the valley to see the tribes, there is always a campground or a restaurant that offers beds. If you camp out at one of these villages, you should hire a guard to watch over your stuff overnight.