As to where to stay I would personally recommend "River Kwai Hotel" which to me is a really good hotel located on the main street, but a little bit retreated from the street noise. At the same time it's in walking distance from almost all of the local tourist sights like the War Cemetary, the river promenade, the railway station, "the strip" with most of the tour agencies, the local department store and 3 km from the bridge (which is easily reached by tuk-tuk). Other nice hotels and resorts are located a little bit out of town which means that you will be needing some kind of transportation to get to the city and back. Website: kanchanaburi-info.com - Kanchanaburi hotels and resorts - River Kwai Hotel - Pictures and Facilities

More nice onformation about the city on this web: Kanchanaburi-info.com: destination guide to Kanchanaburi Province, Thailand