Accommodation
Gummers How near Lake Windermere © Ben Stafford, 2006
Hostels
The Lake District is where Hostelling International membership really comes in handy. The Youth Hostel Association runs a fairly good network of small and medium sized hostels in the area which are perfect for keen walkers or cyclists. Unfortunately the Lake District lacks the bunkhouses which provide cheap basic accomodation in Scotland, but since the usual annoyances of HI hostels like lockouts and curfews are less likely to present a problem in an area with so little nightlife and so much wholesome fresh air to enjoy. The YHA website (linked above) is probably the best place to look for further information and booking.
Bed and breakfast
There are thousands of small bed and breakfast places scattered througout the Lakes. These vary from the out and out terrible - dirty and run by surly unelpful owners, to ones which provide a service well in excess of what you can expect from a hotel. Prices are not that hot, but compare pretty well to hostels if you are travelling in a pair. Unless you are arriving at peak season it is probably easier to arrive on the day and either walk around or get details of vacancies from the local tourist information office - this will allow you to look at the place before you take it, and give you a wider choice (although of course all the best accomodation may have been booked out in advance).