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I would definitely book as early as possible, because rooms definitely fill up. I stayed at Jaeger's Hostel (see my other review). I ended up getting a cheap double room with a friend, but my other two friends got put in a common room/hostel area with a few other people. We booked about a month or so ahead of time and were extremely lucky to find a place at all. I had a few friends who couldn't find a place to stay and were just planning to rent a car and sleep in it, because even all of the campgrounds were full. Book early, especially if you already know you are going to be there!
In looking for a hotel/hostel, the main thing I would focus on would be to book a place as close to the fairgrounds as possible, so that you can easily walk there. Jaeger's was a 10-15 walk, which wasn't too bad.
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