If bike rentals are so expensive, consider bringing your bikes with you! There is a surcharge to take them on the plane (checked in a box) and you'd have to reassemble (and bring good locks), but it might be cheaper, and you'd be more comfortable. Some friends of mine did a tandem tour of Europe, and brought their bike on the plane - it was their first tour as a couple and let me tell you, the romance almost ended when they arrived and he realized he'd forgotten his bike tool for the reassembly! My boyfriend has also checked his touring bike to fly home from a cross-country tour (biked from NC to CA) - I think it cost $60-80 and some airport hassle.

A friend and I travelled through the South of France a few years ago - we rented a car and found it reasonable - we rented for a whole week, that may have made it cheaper. We stayed in mostly 2-star hotels - there isn't really an equivalent here, but they were maybe $80 a night with our own bathroom. Worth it! We made extensive use of Lonely Planet to find good cheap lodgings.

Tiny winery hint - stay away from the town of Chateauneuf-du-Pape - yes the wine is delicious, but there isn't a bottle in town for less than $60.