There are a number of youth hostels in Taipei that newcomers can stay at cheaply. These include Taipei Hostel, Happy Family Hostel, Taipei Amigo Hostel, and the International House of Taipei. For a list of other hostels in Taiwan, try the Worldwide Hostel Database.
Unless you have friends waiting for you in Taipei, you will probably spend your first few days in a hotel. Here is a list of hotels for the train station area in Taipei. This is where you will get off the bus that you take from the international airport. The prices included are the ones that I was told for the cheapest room. As you could probably guess, a higher price usually indicates higher quality.
Huai Ning Street, #7
(02) 2314-8008
$1560 N.T. a night
Royal Hotel
Huai Ning Street, #5-1
(02) 2311-1668-5
$1250 a night
Huai Ning Street, #1
(02) 2311-4811
$1560 a night
Taipei YMCA Hotel
Hsu Chang Street, #19
(02) 2311-3201
$1800 a night
Chung Hsiao E. Road, Sec. 1, #72, 3F
(02) 2388-0808
$1380 a night
Chung Hsiao E. Road, Sec. 1, #72, 4F
(02) 2381-4755
$1100 a night
In addition, this page will take you to pages information for many hotels throughout Taiwan.
In my experience, the best source of all are the posting boards scattered around parks and
universities. These boards are easily recognizable, because they are covered with bits of red
paper, which are actually small ads for apartments or rooms. I found some really great places to
stay on these boards. If your Chinese is not too good, you might want to get a Chinese friend to
help you. Some landlords are really tricky about trying to get you to move in ("You'd better
hurry there was someone here this afternoon...if you don't move in today, he's going to take
it").Don't let anyone pressure you into making a decision. Consider all your options before
signing anything. I stayed in a room (not apartment) with shared bath for about US $100 a month
(although US $150 a month is more common, and a really comfortable, spacious pad could run you US$200 to US$300).
In addition, these sites might have information about apartments worth taking a look at.
Taiwanted
ESL Island - Classified Ads
Forumosa.com - Housing in Taiwan
Tealit.com Classifieds - Apartments and Roommates
Taiwan Fun Classifieds
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