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Hotels.com is one of my favourite sites to use to book travel. First of all, among all the websites out there (orbitz.com, travelocity, airline websites, expedia etc) this is the only website that allows you to cancel your reseversation as long as the hotel allows it without charging any fees. When you are booking your hotel room, the website lets you know if you can cancel in the future and if there any fees associated with canceling.
Another thing I like about hotels.com is that it allows you to search for airlines even if your flight does not depart from a US location. For example I was recently looking for airfare from London to Mumbai. Most other US travel websites will not perform such a search.
Their vacation packages are great too. Most of the time hotels.com gives you a discount for booking flight and hotels together.
The best part about hotels.com is their incentive ..book 10 nights, get one free. no limits.