When I was in NZ a couple of months ago. We were there for three weeks. We spent a week on north island and two weeks on south island. We hired a car from EZ Car, who were cheaper than most of the big companies. Most of the body panels had scratches, but it got us round.
I know of people who have bussed it around NZ. If you want the younger crowd (and I mean 18yr olds) go with KiwiExperience. If you want to avoid the younger crowd go with MagicBus. There was another company but I have forgotten it.
The thing to remember about the buses, is that they will try and sell you side excursions, and when they go from one place to another, they will stop at an attraction. If you are not interested in that attraction, you may not have an option but to sit on the bus, and wait until everyone comes back.
Essentially there is a pretty defined route which you follow. We actually got the brochures from the bus companies and drove around it ourselves. The benefits being, a) we would leave the hotels later than the buses, b) we left when we wanted, c) we could take whatever route we wanted, d) we visted the attractions we wanted e) we would normally get to the hotel before the bus!!
In terms of accomodation. Get a Youth Hostel Association card (called Hostelling International, in the rest of the world). The other thing to get is LonelyPlanet. The list Budget accomodation in towns where you are going to be. The YHA card gives you access to other hostels and somethimes a discount.