A good cheap resort that I've been to Iberostar Laguna Azul in Varadero. It opened in Sept of 2009 so it's still new and has nice clean grounds, great pools, an amazing beach, awesome staff... I'm pretty sure everybody that works there speaks four languages and some speak five.
Here's the tripadvisor review for it, not as fancy as some of the other places mentioned but I had a blast there.
http://www.tripadvisor.com/Hotel_Re...una_Azul-Varadero_Matanzas_Province_Cuba.html
The restaurants are really great but I think it was only three that you get to go to if you're going for a week(or every night if you just sweet talk someone at the door), otherwise go with an open mind food wise and don't drink out of juice fountains and you'll have a fantastic time. Incredibly well stocked bars too for a resort at that price and the most talented bartenders I've ever seen.