I don't understand your note about costs. Google has infinite money. Even mid-tier meetings are held at Moscone, so I don't think it's that expensive.
Are the I/O hordes really going to be visiting the Google Campus? For what reason?
It's pretty weird.
Hotels: If you want something nice, you're going to go to Palo Alto or Downtown San Jose. If you're fine with budget basics, hit all the hotels along El Camino between Sunnyvale and Palo Alto. Personally, I would choose the Hampton Inn on Moffett Blvd. between the 101 and Central. It's clean, pretty cheap, and two blocks from Castro St. with all the restaurants and stuff.
Restaurants: Castro St. and Downtown Palo Alto are your best bets. There are a lot of options on Castro St. so expect it to get crowded but the food is actually pretty damn good. This is not Michelin rated new American food like in SF, so stick to the Asian options if you don't want to go wrong. Get Hot Pot at Little Sheep or Sushi at Sushi Tomi or any of the other 5 ramen places within walking distance. In Palo Alto, you can get finer dining options.
Touristy Things: The museums and cultural options are more limited so take a short CalTrain ride directly to SF if you want that. If you have the weekend to spend, Mountain View is about an hour closer to Santa Cruz than SF is so head over there to get your tan and enjoy the beach.
> Touristy Things: The museums and cultural options are more limited …
Unfortunately the budget basics are not so budget during Google IO. Prepare to spend big bucks if you want to stay close to Mountain View: I booked Best Western Inn in Mountain View (El Camino) for 300$ (!) per night (taxes included). Not to say that all hotels suggested by the Google IO page were quickly full booked.
For the week-end I'm moving to SF where there was much better hotels deals.
The traffic will be horrible on Shoreline and 101. Thank god I don't live there anymore.
But yes, plenty of good options in the area and surrounding areas.
Also, for touristy things, people should consider going up to some wineries in the Santa Cruz mountains. Pichetti, Ridge, and some others are great options and fairly close.
But seriously--the traffic...
Maker Faire: May 20-22
Startup Conference: May 19
Google IO: May 19-20
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If you are going to be tourist, there are plenty of ways to get around. Monterey Bay is also another really nice spot and MV gets you an hour closer.