Tom - where are you flying from? Cheapest option is any of the low cost airlines from the UK - book very early, get a cheap price, simple. Easy jet, thompson fly, BMI baby to name but a few.

Porkchop speaks the truth (good post man) with regards to the people handing out flyers. Its really not that hard to find a place to stay on the cheap, and between Amsterdam Centraal station and Damm Square, you will go past at least 3 hostels or places acting as agents for hostels or cheap accom. Shit man, if you want to do it nice, stay in the Renaisance!
You will have no difficulty locating a coffee shop anywhere within a mile readius of Damn square. Gets tricky near the Van Gough museum, but just keep your eyes open. Some are big and colourful, others look like someones front room.
Also you probably wont need that much spending money. The weeds good, so you wont need to buy that much, just diff varieties.

Dont go package.

Also, just hang in a coffee shop, or one of the bars/coffee shops at the tpo of Warmoesstraat, and you'll meet some like minded souls, promise you.