I too did the daytrippers trip - fantastic value and would advise anyone to do it this way - The train journey is itself an experience not to be missed - The chai wallahs selling the hot sweet tea for Rs3 a cup - The Sambal ordered on the train and dished up at Hubli on the way there and the Biryani on the way back with the rice rolled up in a newspaper and the masala sauce in a plastic bag. The seller gave me some funny looks when I asked for cutlery - I ended up eating it with my fingers - delicious. I found nothing better than just sitting down in the open train doorway wwith my legs dangling and getting the breeze while the sunflower fields slowly passed by. There are both types of toilet on the trains - stand-up Indian and Western sit-down styles at either end of the carriage so they are not to bad, although they are both just a hole in the floor, so using them in the station is not advised
Hospet is REAL India, which means it's very cheap, but the facilities can be a bit limited and the roads are terrible, it's like driving on corrugated iron. The food in the hotel was excellent, and it was the first place I found Kingfisher Red - I slept well that night. There's a lot of walking involved with Hampi, it's a huge site, and do spend the extra to see inside the Temples and Palace it's well worth the "rip off" price we westerners are forced to pay.
One thing that can be a bit disconcerting is the extra attention that blondes get - Ladies if you are blonde you will get pestered for handshakes, photographs and even signatures which can be a bit creepy especially for young girls.