Staying downtown in San Francisco is very expensive in the summertime. Bu, if you're going to WWDC, you really want to stay downtown. You do not want to be taking the BART in if you can help it, and you really don't want to be driving and and looking for parking.
With the closest chain hotels — the full service Marriott and the W — averaging around a $400 daily rack rate, and the Courtyard on 2nd (about four blocks away) costing well over $200 a night, it can be hard to find a place to stay that won't knock the hell out of your travel budget.
Here are a couple of hotels not run by Marriott, Hilton, or Starwood chains that are reasonable and seem to be well reviewed. They are both within a few blocks of Moscone West:
The Hotel Palomar is a well-reviewed Kimpton hotel that's very close to Moscone West. The standard room rate is well under $200, and the AAA discount brings it well under $150 (on average, some nights may cost a little more.
The Powell Hotel, run by the Miramir Hospitality Group is right across Market, probably three blocks from Moscone, and has an average nightly rate of $144 during the week of WWDC.
If anyone has any other accommodation recommendations for WWDC, post them in the comments and I will add them here.
Note: I have not stayed at any of these hotels myself (although I have a reservation at the Palomar for this year), so do your due diligence before making a reservation. I cannot personally guarantee you that they will have every feature that you wish or that they will meet a certain level of cleanliness, I'm just trying to provide some more reasonable alternatives to the big chains within walking distance to Moscone. My personal experience on this matter is very limited; in the past, I have always stayed at the Courtyard on 2nd or the Marriott on 4th because I always had elite status with Marriott from all the travel I used to do, so I was able to stay on points.
Update 1: According to Julio Barros, Expedia had good prices on the Westin and the W last week (I just checked the Westin, and they had it for $174 a night) so it's worth checking them out.
Update 2 Brian Gorby says the Hotel Triton on Grant Ave. is "clean, comfy, and friendly", though you're looking at about an eight-block walk. Not a killer, but enough to discourage you from going back to your hotel during the day. Though, that may be a good thing.
Update 3 Bill says the Intercontintental on Howard runs about $180-$210 and is only a block or two from Moscone and Toby Joe says he's staying at the Clift hotel at 495 Geary (about 6 blocks away) for about $200.
Update 4 Mike Taylor pointed out via Twitter that the Villa Florence was renovated last year and he was able to get a room for only $119.
No more updates - comments are growing too fast - just read the comments are loaded with good suggestions. Maybe I'll consolidate all the suggestions after they've slowed down.