We also booked our two nights through a site called Airbnb, which means we stayed in apartments that locals listed, not hotels. I loved this because I got a glimps into how Portugese people live, not to mention we got some killer deals. The first night we had a two bedroom apartment to ourselves, but had the unfortunate situation with the upstairs neighbors dog that didn't want to stop barking through the night, or the rooster that woke us up in the morning way too early. A rooster? Yeah, I don't remember the last time a rooster was the reason I woke up. But it was fun staying in a residential area and eating dinner right down the street with some locals. Our second night we actually stayed in a spare room of a cute couple's apartment, which we didn't realize at the time we booked it, but it ended up being awesome. They were amazing. Their English was great, they showed a lot of pride in their country, and were really insightful. This couple got out a spare map, and totally planned out our whole next day with what to see. I love getting a local's perspective!
Just in case you are curious, here are the city's we went to: Belem (and visited each thing that is on that link... make sure you get a Pasties at the cake shop and put powdered sugar and cinnamon on top!), Lisbon, Sintra (visited Pena Palace and the Moorish Castle), and ended in Porto.