We were in Lisbon a couple years ago and we really enjoyed staying at Vip Apart Eden Lisboa Hotel (Search on Eden Lisboa Hotel). It was a very nice place with a great location. It is right in the middle of downtown. All the tour and city buses stop out front. You can easily get around for a couple of days without having a car if you want. We were there for 4 days and enjoyed every minute. Here is the e-mail address I have for them (two years old):
eden.lisboa@mail.telepac.pt
and the phone number is:
351 21 321 66 00

The hotel has a pool on the roof with a fantastic view. They have a restaurant that serves breakfast (and lunch I think) near the poll. It is a great way to start the day.

You can take a bus from the airport to the hotel for very little money. It drops you right in front. There is not a lot of parking in the downtown area (as with most big cities) and the streets are narrow. This was why we chose to get around without a car there. And it was very easy to see everything and get around without a car. It forced us to walk around in the evenings which is a great way to experience the local atmosphere.

One thing to know about Lisbon if you have not been there before: people stay up very late. Dinners at all the local restaurants don't really get started until near 10:00 at night. Make sure you get into one to hear them sing Fada (Portugese Folk Singing).

Here is a link to a web site with some great info about things to do and see in Lisbon.
http://www.portugalvirtual.pt/_tourism/geninfo.html

You will have a great time there. It is a wonderful city that is rich with history.

Mike