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Now that I have purchased all my airfare, I am trying to put together a budget for 7 to 10 days in Syria. So far, the information I got tells me that it is pretty cheap over there. What exactly does that mean?
What should one expect to pay for hotels, meals, transportation?
Any advice as to what hotels to go to in Damascus, Aleppo, Hama, Palmyra?

During our time in Syria, we spent around S£3350 per day for the two of us. That's about $70. That number is actually fairly high for Syria, as we did on a number of occasions take private cars to get to out of the way attractions. Particularly, we're crap negotiators, so the first car we hired we paid his initial asking price of S£5000 to take us on a huge round starting in Palmyra, up to the Euphrates and then around to Hama.

It's odd...I'm not very upset about that because I feel that the tour we got was worth that much. I'm more ticked off at the taxi driver who picked us up at the Damascus bus station, and, after we agreed to an inflated price because he promised change would be no problem (had only been able to get S£1000 notes prior to arrival), then proceeded to overcharge us in US dollars, since he actually had no change. Total cost - $3 US for a ride which should have $1.20 US, yet it still ticked me off more than an honestly negotiated overcharging incident.

Also, in Damascus, we lived the high life, eating at fancy restaurants and going to movies (first chance we'd had to indulge in western cinema in almost 2 months).

Hotels
Hotels vary a lot...aside from Palmyra, we stayed in the cheapest places we could, and were paying from S£500-S£1100 per night for a 2-person private room, sometimes with ensuite, sometimes without - ensuite was more a matter of availability, would only make a tiny difference in price. Damascus is on the more expensive end. Those were, of course, no star hotels, but they were quite pleasant, and had character.

In Palmyra we thought we'd splurge and go for a tourist grade hotel...cost $35US per night, and since we paid in S£, they gave us a crappy rate instead of the usual 50-to-1 that most people used - meant we got a nicer bed (a double instead of 2 singles), newer facilities, and a larger selection at breakfast than usual. The hotel didn't have a whole lot of character, and Kathy got sick, presumably from the yogourt at breakfast (lesson learned...don't eat buffet yogourt). Overall, I wouldn't say it's worth it to go in for the higher end hotel, but that's your call.

Meals
Meals can be dirt cheap or just fairly cheap. Food is abundant in Syria...there's a lot of fertile land. At the cheapest end, you can get street food for next to nothing. We ate a few meals at juice stands in Damascus, where a meal with fresh juice cost about a dollar. At the high end, we dined at some fancy restaurants in Damascus, and I don't have exact numbers written down, but I believe the most we ever spent was a little over S£1000 (total for 2 people) for dinner at the Cham Palace Damascus (Cham Palace is a government owned, 5 star hotel chain). A pasta dinner (something we hadn't been able to get for a while) complete with live music.

Transportation
I talked about a couple of transportation experiences above. Taxis are cheap. The first couple we took in Damascus, we asked the price, and ended up paying first $3 and then S£200 respectively for trips to and from different bus stations. Eventually I just took to having a S£50 note available, and handing that to the driver at the end of the ride. Got change once, and only twice was harangued for more money, and ended up paying S£75-S£100.

Intercity transportation is also pretty cheap. There's basically 3 options - microbus, which is little more than a shared taxi/minivan; Karnak buses, which are government run and roughly equivalent in service and comfort to Greyhound, and Luxury buses, which is a private system trying to emulate the Turkish bus system (not quite there, but a valiant effort). Oh, and we drank the tap water they provided on board with no ill effects.

I never bothered with the microbuses, being slightly intimidated by the fact that there was only Arabic writing for destinations, and, unlike in Jordan where we'd taken minibuses frequently, no guarantee there'd be an English speaker available to help me out. (Never did learn more than a few words of Arabic) Karnak, we only used for the international trip from Amman, which, of course, was fairly pricey. But even using the luxury bus system, it still cost very little. The first luxury bus ride we took, Damascus to Palmyra, cost S£125 per person.

But really, the cheapest and best way to get around, if your route allows, is train. We only took one ride, from Lattakia to Aleppo. It cost S£75 per person for a first class ticket (since you're a foreigner, they will automatically sell you first class...I'm not sure they'll even allow you to go second class), which was far more comfortable than even a luxury bus, and gave us amazing views going through the mountains.

Specific recommendations
We depended heavily on the Lonely Planet in Syria for hotel recommendations. This is largely because there was little on the internet, and I find it very difficult to just find a place when I arrive in a new city without knowing where to look.

- Damascus: Hotel Al-Rabie. Beautiful Damascene house, an easy walk from the old city. There's another hotel on the same street, probably quite similar. I believe we paid about S£1100 per night, twin room, shared bath.

- Palmyra: We stayed at the Orient. There was nothing particularly memorable about it, but it did have a (tiny, but functional) bath tub, which Kathy enjoyed. No reason not to stay there, but Palmyra is one place where finding a hotel won't be a problem. $35 US, breakfast included. Don't eat the yogourt. The buses usually drop you off a little ways from town, near a hotel that has a view of the historic site, but is a long walk to get anywhere. I'd suggest getting into the central area where there's restaurants and lots of accomodation choices.

- Hama: Riyadh Hotel. S£550 per night, I think we had ensuite, very helpful staff, and they arrange car trips at reasonable prices to attractions in the region. Not a whole lot of character, but you can't have everything. The LP also listed the Cairo hotel, next door, and says the two are very competitive, and thus have comparable prices and service.
- Aleppo: We stayed at Zahrat al-Rabie (they have a website, just google Spring Flower Hostel). It was an old house and definitely had character. It's very busy, and is pretty much the backpacker spot in Aleppo, so there may not be much availability. We ended up spending our first night in the dorm on the roof (S£150 per person), before moving to our own room (S£500). I'd suggest, if you can't get a room with private bath, don't stay there...the shared bathrooms are tiny cubicles with shower and toilet on top of each other, and coming in to use the toilet immediately after someone's showered means everything is soaking wet.

The most storied hotel in Aleppo is the Baron, which was the place to stay during the golden age of railroad. From my reading, I guess it's most famous with Agatha Christie buffs, but has had no shortage of other famous passers through. I can't remember what their prices were, but I seem to recall it was quite affordable by western standards, if still a bit pricy for Syria.

Other notes
We were there a year ago, so some prices and other things may have changed.

Bring an ISIC card, if you can get one. The savings on entrance fees are completely ridiculous (Regular foreigner admission to historical sites usually runs S£300-S£500. Student admission S£15-S£35.)

We found that travellers cheques were basically useless...most change places will only change cash (US, Euro or Jordanian Dinars). We were told the only place to change cheques were the proper banks, which we didn't test, since they also have bank machines. There is an exchange place in Palmyra, but neither bank machines, nor anywhere that takes traveller's cheques...bring plenty of cash.

On the topic of bank machines, when we were there, the most common - Commercial Bank of Syria - was not connected to any international networks. The Real Estate Bank, which was only slightly more difficult to find, was connected to both Visa/Plus and MasterCard/Cirrus. The maximum withdrawal seemed to be S£10,000.

Change can sometimes be a problem...I'd bring a few US ones from home to use as backup, and ask for smaller notes when you're changing money.

And, I recommend doing any shopping you're planning in Damascus. Unfortunately, tourist touts are starting to catch on in Aleppo, and we found that wares there were either very functional for locals, or very kitschy for tourists. Damascus seemed to have more higher end local shoppers, so there was more interesting stuff. The Aleppo souq is still worth seeing for it's architecture, but I found it less fascinating to explore than the winding market streets of Old Damascus.

That is all pretty good advice from 2wanderers.
Food is very cheap. You can get a great chilli chicken shwarma in the old city for just US 25cents or a steak and vege meal with beers and argileh for US$5-7.
You can get a taxi to almost anywhere for US$1. If you pay more they are ripping you off. However,there are some taxis that have set prices and the go up of an evening.
There are some good hotels around the old city and close to the Ministry for Tourism.
Get to the Christen end of the Old City on Straight Street of a Thursday night for a few good night spots. Dont over look the little places. Found a great one that was only 3 metres square inside!
My American friends found that they got a better reception when they said they were from Australia.