For a million-dollar view on a backpacker's budget, book yourself a bed at this hostel overlooking the harbor. It was built in 2010 by adding new wings to a period home and is within walking distance of the Main St scene, beaches and ferries. Now the caveat: there are only 42 beds, so book well in advance.
Dorms and private rooms are available. Prices are for members and include linen and breakfast; non-HI members pay an extra $3 per person.