Where you stay will depend very much on what you want from your trip to Kraków. For historical splendour, you should pick one of the Old Town locations, although this comes with a price tag. If budget is a factor, the areas immediately outside the Old Town can be a good compromise.
Meanwhile, Kazimerz has a special atmosphere all of its own. The good news is that central Kraków is very compact and many of the key attractions will be walkable from any hotel in or surrounding the Old Town. The outer zones are less convenient, although you may have a specific reason for making one of these your Kraków base.
Kraków has great hotels in all budget classes.