Because we moved down here only about a year ago, most of our friends and family will be flying/driving 800+ miles to attend our wedding. Thus, one of my first tasks as a newly engaged lady has been to arrange and confirm hotel blocks for our guests.
In terms of proximity to the venue, the closest hotel is 2 miles up the road. It's a fairly small inn, but it is gorgeous. Silas and I stayed there on New Year's Eve, on a weekend getaway. We called, and while we wouldn't have enough people to do a group block, we can get a discount on the hospitality rate. Also, booking this far out, we can get an early-bird rate of 20% off, which is better than most hotel blocks I have encountered so far. We believe that because the inn is so small, this will probably be for immediate family, as well as our rooms for the night before the wedding.
As for the other hotels, we used HotelPlanner.com to allow hotels to bid on our group. Because there were no other hotels in close proximity, I chose hotels in this range based on proximity to the airport and other shopping.
We tried to choose hotels that would also offer a range of pricing for our guests. In the end, we settled on a hotel in the $110-$140/night range, a hotel at $90/night, and a hotel at $70/night. It represents a good diversity, and will allow guests to choose how much they're comfortable with paying. I certainly don't want anyone to feel put out based on the hotels we chose!