I agree with all the positive reports on Priceline. Yes, those rooms are sold at ridiculous prices because these hotels have low occupancy and need to fill the rooms.
My brother worked for a very large, 4-star chain, and admitted fully that they would, if sold out, give Priceline guests rooms that were not the most desirable. He also suggested calling soon after making a reservation to request non-smoking, as when you book through Priceline, you are not booking with the hotel directly. Priceline rooms come through at the hotel through the fax, and can sometimes sit there for hours until people notice them and enter the reservations into the hotel's system. During peak times, this could lead to some problems.
I used Priceline to book a last minute room at the Sheraton by CrossRoads (right outside DTD). I got it for $59 in July (crazy) and our room was "normal." This was an outstanding rate, and our service did not lack in the least.
I also booked with a Sheraton (seems Sheratons always accept my bids) in Toronto, and received two connecting rooms, for less than a 2-star suite hotel in the area ($79 per room per night, Canadian...a steal!). I called the morning of check in to request rooms next to each other, or at least near each other, and the front desk clerk went out of her way to give me connecting rooms. A+ service.
A lot depends on the hotel. But calling and speaking to someone at the hotel for requests (being extremely friendly during the call) and following up to confirm any requests the day before, can help ensure you have a great stay! Still, when using a service like Priceline, it's always safer to assume you're not going to get all your requests. That way, if you do, you are pleasantly surprised!