The drive isn't too bad and it a cheap way but I find the best way to go is to fly into LaGuardia. The cab ride from there to Manhattan is very fast but sometimes flights into Newark are a bit cheaper. Driving takes a lot of time out of the trip and hotels charge a large parking fee per day. Plus, you wont want your car to get around in New York.
Stay in Manhattan. It not worth it to stay elsewhere and for the cost of travel into the city and time, its worth it to pay a bit more to stay in the city. Plus, you can find deals all the time on hotels. There are a lot of websites to check out but i have found some good deals on Expedia for my flights plus hotels there.