I don't have all the answers, but I do have some. Here's what I've found.
Look for packages.
The best way to get a lot for a little is to book a package, usually with the airline directly. I use travelocity for all of my "build your own" vacations, but I pay close attention to what else the airlines have to offer--especially the discount carriers like Southwest. Southwest's special offers page is full of deals on airfare and they occasionally include hotels. The tradeoff with packages is that sometimes they include things you're not too keen on, or they require a little more effort on your part. For example, before my recent trip to Ireland, I found a great deal for $600 round trip airfare and two hotel nights. The drawback was that it also included a lot of guided touring, which is not how I wanted to enjoy my vacation. Sometimes, you find an incredible deal, but have to change hotels a couple times. Weigh the pros and cons and you'll often find that significant savings outweigh minor inconvenience.
Bragging spot: The best deal I've ever gotten was in 2002 when my friends and I scored round trip tickets from Chicago to London plus three nights free in a London hotel for $223. With taxes and fees it ended up being closer to $300, but who cares! I could have spent that on hotel alone. The drawback was that we lived eight hours away from Chicago, and we had to book it direct with the airline over the phone--big deal. Since there were six of us, it was more economical to borrow a minivan from a friend's mom, drive to Chicago and pay for parking.
We got this deal because it was March, which is the slowest time for British travel since it's a bit soggy (it's always soggy, just bring a scarf), and British Airways ran a special that we happened to notice. No tricks, nothing fancy--I don't have an in at the airlines, we just pay attention.
Travelzoo is another fantastic place to find package deals, and you can sign up for a weekly email that delivers them right to you.
Priceline it first.
Do a little sleuthing to see the average price of whatever you're looking for, and then throw a lower offer into priceline just to see what happens. Priceline is particularly good for last-minute deals, but it's always worth trying before buying. I've gotten luxury hotels (normally $150+ per room) in Boston and Montreal (during jazzfest!) for 75% less than retail this way. It's certainly not guaranteed, and last time I tried to book a hotel in Boston, I barely saved anything, but it's still worth the try.
This is one that I haven't tried yet, but find very intriguing. The new trend in frugal travel is to stay with other people in their homes either for free or for a significantly cheaper cost than a hotel. There are a number if sites dedicated to helping people find a place to stay without going broke doing it. As I understand it, the fee-based services don't require you to open your home in exchange for staying with someone else, but the free ones do. you can interact with your guests/hosts as much or as little as you like, but often it's nice to arrive in a new city and have an expert resident right there for the grilling.
Couchsurfing.org is one of the free ones, Airbnb is a pay-per-stay, which I read a fascinating article about recently.
To keep current on frugal travel trends, I recommend the New york Times budget travel section, and frugal traveler blog. They cover everything from making cheap international calls to how well you can travel with an iPad--good stuff.