Kaanapali is a planned resort development. However, it is really nice to be able to stay in one place and walk to many restaurants and have a beautiful beach in front with lots of activities. Lahaina reminds me of Key West. Fun, kitchy, a bit touristy, but with a flavor of an old fishing town. Kihei is a locals town with a bit of visitor/tourist thrown in, nice beaches, and lots of activities, but most resorts/condos are not "ocean front", instead you have to cross S. Kihei Road to go to the beach. Wailea is about luxury, money, and nice beaches.
I like those descriptions. Kind of like the question "how thick of wetsuit should I wear", the question "what's the best place to stay" doesn't have the same answer for everyone.
For first time visitors to Maui, I recommend staying in the main section of Kaanapali, i.e. somewhere between the Hyatt and the Sheraton Black Rock. Lots of activities. 100% tourist resort. Close to Lahaina for strolling around town. "Cheap" is a relative term, but the Whaler's condos and the Kaanapali Alii are lower priced than most accommodations in the main Kaanapali area.
My description if Kihei is that it's a 5 mile long strip of condos and strip malls that in many ways remind me of a the sort of beach town people go to on a daytrip from a nearby big city. A great place for me to stay 3 months every year, and a great place for repeat visitors; but not as touristy (in both the good and bad senses of the word) as Lahaina and Kaanapali.
Napili, Kahana, Honokowai and the far north Kaanapali area are great places for summer and fall, as they get cooling breezes that wrap around the north of West Maui. Those areas aren't so great in the winter.
The far north end of Kihei and the Maalaea area have the disadvantage of lots of wind when the trade winds are active. Great if you're a windsurfer. Not so great if you or your family want to hang out on the beach.
Lahaina in West Maui, Wailea and the south end of Kihei are all pretty well sheltered from the tradewinds by the mountains and tend to be warmer and drier. Nice in the winter. Not so great in the summer and fall, when Lahaina in particular can get very hot.
Before buying a Maui condo in 2004, I stayed in just about every hotel in West Maui, on trips both with and without my wife. For solo trips, my favorite was the Maui Islander, now called the Outrigger Aina Nalu. A rambling set of 2 story motel like property just 2 blocks uphill from the banyan tree in downtown Lahaina. Basic, clean, comfortable accommodations such as you might at any mainstream hotel/motel chain on the mainland. Very convenient when diving each day, and then hanging out in laid back Lahaina in the evenings. The motel is a short walk back from whichever restaurant or bar you're in when you finish your evening.
Lahaina Shore condo is a brisk 5 minute walk or 10 minute stroll from town.
If my wife was hesitating as to whether she would join me on a trip to Maui, agreeing to book 2 or 3 nights at the Four Seasons would always convince her. Of course, the nightly rate at the 4 Seasons is very close to the weekly rate I paid at the Maui Islander (Aina Nalu), but it is truly a top notch place, and the staff has an incredibly good attitude. It truly warrants its 5 star rating.
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If you are looking to save money on housing, then look at vrbo.org -- VRBO = vacation rental by owners. A potential problem when renting condos, is that there is a huge variation in units, even within the same complex and with the same floor plan. You might get a condo that was fully remodeled last year. You might get a unit that has the original furnishings from 1985, looks like the cleaning person is blind, and is in a general state of disrepair. (Think of what your house would look like if it were occupied by guests for a year or more, without you coming by to do basic routine maintenance like fixing loose drawer knobs, adjusting sliding closet doors, fixing leaky faucets, etc.)
Renting via one of the larger rental agenst such as whether through an agent such as Castle Resorts, or Aston Hotels and Resorts, or Maui Condo and Home, means that you will have somebody to contact on island and stand a decent chance of getting moved to another condo if the one you are given is really bad.
When renting directly from an owner, you often have no choice other than to take that one unit, because that's all that the owner has.
