I went to Oahu about 10 years ago! I LOVED IT!
We stayed at this hotel...
Waikiki Hotels-Waikiki Sand Villa Hotel: Honolulu, Hawaii Its nothing to brag about really, but we barely spent time in it. It was cheap and had a pool. I loved the open lobby. In the mornings I would sit on the balcony and drink coffee and watch people kayak in formation on the canal. Its about a 3 min walk to Waikiki Beach but its not on the beach.
For us, my (then) boyfriend's mom owned a travel agency. She got 4 free round trip tickets to Hawaii and we had 6 weeks notice, we were so young and had no money, so for us the hotel being $65/night was awesome! If you are going as a DREAM trip, then I'd suggest something right on Waikiki beach for sure! Something more extravagant.