Papua New Guinea offers a wide choice of accommodation for tourists with very little of it budget.
Hotels are very expensive about USD100/night. Guesthouses are the best budget option in the towns but even then still expensive about USD40/night. The least expensive option is to stay in village guesthouses about USD15/night, and that is where the fun is anyhow.
Out of the many churches in PNG, some have guesthouses that can be very expensive and nice. Others operate cheap and really basic accommodation, usually for their visiting "brothers" but they'll be delighted to host a backpacker too. The Evangelical Brotherhood Church EBC for example operates rustic accommodation for as low as 25 kina per person and they have centers in or around the capitals of 18 PNG provinces. Churches or missions that do not operate accommodation will probably not turn you back either and will host you for free or against a small donation. In villages without any formal accommodation you will be offered a roof for free or little money. Even in towns you might be offered to be hosted by some of the many incredibly friendly and curious Papua New Guineans you will meet and talk to on PMVs or in the previous town. Often they will also give you the contact of their relatives or wantoks in your next destination. Besides PNG's image as an unsafe destination, it is very easy to tell the troublemakers from the good people the absolute majority. It is a good idea to bring a small tent, mat and a sleeping bag/sarong if you are planning on roughing it. If hosted by someone, you will most often be provided with some kind of roof but it's going to be a lot easier for your hosts if you have a tent and mat or at least a mosquito net. If you are hosted by a family for free it is a very good idea to go to the market and bring some rice and food for everyone's dinner. If you eat their food, offer to pay. Wild camping near people's homes without asking permission first is not a good idea - it is neither safe nor polite.
Port Moresby has international hotels including the Crown Plaza and Airways International, mid range hotels such as Lamana and guesthouses. The regional areas offer International and budget hotels depending on the size of the town and some provinces have guest houses. There is a new eco-tourist lodge in Alotau called Ulumani Treetops Lodge, the place is beautiful overlooking the Milne Bay and offers a new bungalow or backpacker options.
There is a very expensive lodge USD200/night that sits on the edge of Tari basin, called Ambua Lodge that is run by Australians. This lodge is "an inspired mixture of local architecture, spectacular views and modest luxury off the beaten track." It is in the Tari Gap 210 m in the Southern Highlands, which is the homeland of the Huli clan with their human hair wigs adorned with colourful flowers. It borders on the mid-montane rain forest and grasslands which gives a spring feeling all year round. This lodge won the 1991 Pacific Asia Travel Association's Pacific Heritage Award which cited it due to its "superb example of culturally sensitive and ecological responsible tourism."
A stone's throw down the road from Ambua Lodge is the more rustic Warili Lodge, which is run by locals, is only $20/night, and offers birdwatching as good as, or better, than that offered at Ambua Lodge.