Back in 1999, I arrived in Phuket by bus from Bangkok and had my eye on the On On Hotel, as recommended by my good old Lonely Planet guide, and the hotel had recently been used as part of the filming of "The Beach" starring Leo. The On On doubled as a cheap Bangkok backpackers hotel. It looked great, lots of character, an old building, apparently the oldest (or one of the oldest) hotel in Phuket Town. On the day I arrived, the On On was full, so I had to find an alternate for a night, then I went back to On On, as I was determined to stay there. Don't remember the exact room rate, something like 180 Baht. It had a little cafe attached, a sagging bed, walls that did not go up to the ceiling and the wooden construction inside was so rickety that my bed bounced if someone walked past outside. I only stayed the one night, as next day I headed to Patong beach to look for work as a dive instructor. On On stayed the same for many years, but a few years ago it closed for a huge face-lift, reopening in 2013 as "The Memory at On On Hotel" with some fancy rooms (and some dorms too). Low season prices look very good. There's still a cafe, now tarted up and called the Baba. I saw this video online, obviously a promo for the hotel, but very nicely done ....
The Memory at On On Links
Official Hotel Website
Memory at On On - Booking @ Agoda.com