Oh, I envy you! I love Venice and just missed the carnival last year by a week. One day I'll make a point of going back during that time, as it must be amazing. As far as hotel, do you have it booked yet? I stayed in a great place that was very clean, cheap, and had its own kitchenette. The best thing was we didn't have to share a bathroom, which I've been told is fairly uncommon. It's about a 10 minute walk from the bus drop-off, about 15 from San Marco Square. Let me know if you would like me to dig out the info.