I stayed at a Travel Inn (?) on south sore and RIGHT next door was a pizza micro brew place and RIGHT next to that was T.H.C. (Tahoe Herbal Club) so if your into that too it's got everything. Also the gondola leading up to heavenly is about a mile down the road. I got the room for $50 a night during the season too.
My wife and I stayed at the Embassy Suites in South Lake Tahoe which is right across the street from Harrah's. I would imagine that the room rate at Harrah's would be pretty reasonable and the Heavenly gondola is within walking distance - about 2 blocks.
Heavenly and Kirkland were nice but Squaw Valley has a really cool vibe about it that I can't really explain. I'm looking forward to going back there at some point in the near future.
You can stay in a Casino in Reno and drive to the slopes. The hotels are extremely cheap there due to the economy and it's 30 minutes away from squaw and a few other places. You can also hit mammoth for a day, it's only 2 hours away from Reno.
It really depends if you want to drive though.
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