For those seeking an authentic and affordable experience in San Miguel de Allende, I recommend any of the smaller, centrally located hotels. My group of traveling women stayed at Casa Rosada directly behind La Parroquia and one block from the central plaza, El Jardin. It was charming, had a very helpful staff and was near many of the town's cultural offerings. Rooms from $90 a night.
Casa Rosada, 12 Cuna de Allende, www.casarosadahotel.com/en-us