Having recovered from the mid-90s wars, Sarajevo is still struggling a bit to attract tourists, although those who make it tend to rate the experience very highly. Among its other charms, the city is one of the cheapest in Europe, so it’s not a bad place to relax in between expensive destinations.
Hotels in Sarajevo are very cheap by European standards, as are the hostels. Those seeking a bit of luxury might be able to afford it here, especially during the off season when fancier hotels compete for business. You won’t find as many English speakers here as you will in most of Europe, but most people get by just fine and report that people tend to be very friendly.
Food and drink are also very cheap by most standards, especially if you eat the local sandwiches and other specialties rather than international cuisines. Even museums are extremely affordable, however funding and political problems have forced many of them to close in early 2012, so Sarajevo is not without problems for potential visitors.
Note: The currency of Bosnia and Herzagovina is the Converted Mark (KM), which is fixed to the Euro at about 1.95KM to €1. Prices here are shown in Euros as a default, even though you’ll use KM when there.