RE: car vs. transit
I live in Portland and I would say that it depends on exactly what you'd like to see here. There are some things very accessible by the public transit, and other things not so accessible. If you stay somewhere on the lightrail line, then it's easy to get downtown (however, in my opinion, it's slower compared to most large cities' public transit). There are a few decent hotels in the Lloyd District (east side) (Doubletree, Courtyard, Holiday Inn, etc) that are within walking distance of the lightrail stop and about 10 minutes from downtown using that method.
Once you're downtown, there are buses and the streetcar to get around. It's pretty easy to just walk to wherever you're going while downtown as well. If you're wanting to see the Japanese and Rose Gardens, you can ride the light rail under them to the Zoo, and then take a shuttle bus to them.
If you can, give a list of things you'd like to do here and I'll try to better advise.
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