Advice re Katoomba & Spiders!

Hi, I've another question. We'd like to visit Katoomba. Could anyone
reccommend a good place
to stay that would range from 120-170 a night for 6 people? Like most
people, we're trying to do
things on the cheap but a lot of the websites for Katoomba list very
expensive accommodation.

Also, my nephew is freaked out about Australian spiders and thinks there
will be one lurking under
each blanket. What is it with the spiders anyhow? They'd be deep in the
bush, right? He thinks we
have to be extra cautious or something. Now he's got my mom worried and
it's getting contagious.
What's the real story? Thanks.

Kathy in BC, Canada