If you're looking for luxury, you'll find the most options along Avenida Bustillo, the main road outside town that runs parallel to the lake and leads to the Llao Llao Peninsula. The larger hotels in the city (such as the Panamericano) tend to cater to tour groups or students and aren't especially luxurious or service oriented. If you're planning to rent a car, then by all means stay outside the city and drive in at your convenience. You can also take the local bus or a quick taxi ride.
During the high season (Dec 15-Feb 28 and Easter week), prices double. Many hotels consider the winter months of July and August to be a second high season, with prices to match.
The cheapest rates are from March 1 to June 30 and September 1 to December 15. Dates vary; inquire before booking and always ask for promotions or discounts for multiday stays. Rates listed here are generally for high season.
Cabanas -- The southern shoreline of Nahuel Huapi Lake is dotted with cabin complexes for visitors. Some have only one or two cabanas for rent, while other have up to a dozen. They're a nice way to be self-sufficient, prepare your own meals, and make yourself at home. Some can be very affordable, especially outside the high-season months of January and August. Bungalows and apart-hotels are similar options. Try the fun El Bosque de los Elfos, Avenida Bustillo, Km 5 (tel. 02944/442356; www.bungalowsdeloselfos.com.ar), or the upscale lakefront Puerto Pireo, Bustillo Km 17.1 (tel. 02944/448484; www.puertopireo.com.ar). Patagonia Vista, Bustillo Km 21.85 (tel. 02944/448735; www.patagoniavista.com.ar), is a new complex also right on the lake, with lake houses available.