I spent five years living in Edinburgh as a student and loved it! We try and go back regularly to visit with the kids.
Edinburgh Festival - yeah it can be a bit cowded, yeah - they bump up the prices but I have always had a great time.
The atmosphere is brilliant. Even if you don't go and see anything the vibe in the city is great. BOOK EARLY!
Can recommend the B+B - Ashdene House, Mr&Mrs Daulby, 23 Fountainhall Road,
www.ashdenehouse.com, tel 0131 667 6026. Stayed there in Sep 07. Very Quite Street, on street parking if taking the car.
Its not in the centre but near the Univeristy District so not too far from the action. Breakfasts were good, rooms clean and tidy and staff very pleasant.
Have a great time.