If you're coming in on a flight, then I'd recommend staying downtown. The UP Express train takes you from Pearson Airport to Union station downtown. If you're flying in to Billy Bishop aka Toronto City Centre airport, then there's a bus that will take you to the Royal York Hotel downtown. There are lots of agencies that work out of downtown, but you also have sights like CN Tower, Eaton Centre for shopping, Rogers Centre for a ball game, aquarium, museum, shows and bars. If you're more outdoorsy, then you can easily get to the Toronto Islands by ferry from downtown. The Royal York would be an option as it's across the street from Union Station, but it's pricey. You can also look in the Yonge and Dundas or Yonge and College areas where there are a few hotels.
If you're driving in, then you may want to stick to the suburbs to avoid the insane traffic. Although some hotels may drop you off at a TTC subway station so you can get downtown.