We stayed in Taidong (Taitung) one night in May 2009, originally planning to go to Green Island, but then electing not to rush there, spend four hours, and then rush back. We arrived at 9AM, and because the guy at the front desk didn't speak much English and we even less Mandarin, we were allowed to check into our room at that time. (In retrospect, we're pretty sure he was trying to tell us we couldn't check in until noon; however, the room was ready, so we may be wrong.)
Room was pretty small but had enough space for a queen bed, desk, small table and chairs, and -- most importantly -- a small bathroom ensuite. Power is centrally controlled by a switch downstairs (most amusing :) ), but once turned on, they did not turn it off at all during our 22 hours there.
Room came with basic amenities, including bottled water, and the air conditioner worked well -- much needed during our stay. There is an elevator, as well as a computer you can use downstairs, but we couldn't figure out how to type in Western characters :)
One thing to note if you book this hotel -- I believe it is both a hotel and hostel, so be sure to check that you are in a hotel room (with bathroom) before completing your booking (if that's what you're after). I printed the detailed confirmation just in case we needed it to confirm what we had paid for. We paid something like US$45-$50 for the night and found it to be a fair price. (There was some confusion when we checked in, however, that resulted in our thinking the Thai agency we booked through may not have passed along the money we paid to the hotel!)
Our plan had been to ride the bus to a sandy beach approx 12km north, but after much talk with a man who we believe was the owner about how to get to the bus station and select the right bus, we determined that the beach was "under construction" and not accessible. Instead, we walked along the rocky shore several blocks from the hotel and wandered around the streets of Taidong. It was nice to have a day off from the sightseeing and hiking.
Hotel is about 10 minutes taxi ride from the train station. Our ride was TWD215 (approx. US$6.50), though our taxi driver took the TWD250 I handed him and refused to give change, even upon my protest. The hotel owner, however, will take you to the train station for a TWD200 fee, paid upon hotel check-in.
There is a Carrefour in walking distance (as well as a "farmer's market"-branded indoor supermarket a little farther) if you need to buy any rations. We highly recommend the sushi bar downstairs inside the Carrefour for the cheapest nigiri, maki, and handrolls you'll ever find! TWD30 per plate (US$0.95), with shrimp sushi just TWD10! And yes, it was fresh, tasty, and served up on a conveyor belt! It was a lot of fun and filled up with lots of locals.
A couple of things to note when traveling south in Taiwan: 1) In Taiwan, it is not considered impolite for people to stare and 2) They don't get tons of Western tourists down south, so if you are Western, be prepared to be stared at. We actually found it very charming and endearing and often smiled as we stared back.