Depends how long you want to stay there. Have stayed near it, and have also taken bus from Toronto and stayed overnight at the Youth Hostel and walked down to the Falls in the morning. Bus from Toronto takes a few hours.
Do not stay in Niagara Falls: it's too expensive. Plus when you've seen the falls....well, you've seen the falls, and without a car you are sort of stranded and cannot get around to see other interesting sites a few miles away. Stay on Toronto which is about 2hrs away and take the coach tours as Campbell suggested. Plus Toronto has many more attractions than Niagara and a great public transit system. Check out some of the bus tours on this site: http://www.niagaratours.ca/. Also Google Toronto tourism and get some ideas. PS: I live in the area.
The canadian side is better than the yank side. I must say it didn't impress me much, but do go on the Maid of the mist (boats under the falls)
Hotels at the falls are overpriced, usually japanese owned and occupied, and not of fantastic quality.
Food is ok but more expensive than elsewhere.
Went a couple of years ago and the river stank, in summer the fly life is quite bad.