I stayed at the Hangzhou International Hostel, which I highly recommend if you want to stay in basic and clean accommodations very near the east side of the lake. The lake is only a few minutes walk from the door. There is very nice coffee shop next door to the hostel which serves a good breakfast, pizza, and a decent club sandwich. The front desk staff did speak English and was very helpful.
If you do plan to visit, make sure you have comfortable shoes. The lake is quite large and there will be a lot of walking. There was a small shuttle that operated on the east side of the lake. You can also get a boat ride to explore the lake on the water. Many people also rented bicycles to get around. There is a lot to see at the lake but the Leifeng Pagoda is probably the most popular site. There are many walking paths along the lake that are quite beautiful and quiet. If you want a more natural setting, venture to the west side of the lake. The West Lake Museum was free and provided some very interesting information about the formation and history of the lake.
If you want some local food, Grandma's Kitchen is a popular restaurant chain that serves a good selection of food. Just be prepared for a wait. There are several locations in the West Lake area. Slim's is a restaurant serving decent western steaks and hamburgers.
I would love to return to Hangzhou to see West Lake under different weather conditions. I'm sure it will be just as beautiful but from a different perspective