I thought that Tamarind was quite good when I was there several years ago (hmmmm ... still haven't done my review for it yet). Had one of the floating rooms. Room was big, bed comfy, bathroom, and a nice and big front veranda. Walls were a bit thin, though this would not have been a problem had our neighbours been quieter. Inexpensive. Good location, too. Close to eating spots, bars, shops. If you take the train there from Thonburi Station, it is about a 5 minute walk towards the river. Quite a bit further if you go to K-buri by bus. There are a handful of guest houses in that area.
Have also stayed at Nita Raft House. It's an older place (I stayed there in 1992), though I believe they've upgraded as you can get a room there that costs over B600. It's close to the bus station (about a 5 minute walk), the older part of town with the market and eating places, the Jeath War Museum, and the cool little ferry that chugs back and forth across the river. Where it is isn't as much of a backpacker scene as where the other guest houses are. I prefer it, actually.
We were in Kanchanaburi a few weeks ago and stayed at a realllly nice place close to the river, called Sabai @Kanchanaburi. It was about 1300 baht per night with a great garden, pool and walking distance to the bridge and river. Would highly recommend! Check out thier website here http://www.sabaiatkan.com/
You can also read about out trip on my blog http://www.onedayillflyaway.com/
Have a great trip!
I stayed at a couple of riverside places last April.
Noble Night Guesthouse in town has a variety of rooms down to budget and is surrounded by cheap eats/drinks etc - although its own restaurant was very competitive.
Boutique Raft Resort is a lower-midrange rafthouse place on the river abt 2km from Nam Tok railway station where the Death Railway now terminates. I spent 3 of my more enjoyable days in Thailand there - its restaurant was not bad price wise and there were budget options at Pak Meng pier about 300m away.