When traveling in the Kansai region, most people will focus their trip on Kyoto. There's a good reason for that - it's where all the temples and culture is. But Osaka is a 30-minute train ride away and has plenty to see and do itself. It also serves as a good hub for those with an extended trip to the area, because it provides good access to Nara, Himeji, and Kobe in addition to Kyoto.
Accomodations are cheaper in Osaka. I stayed at a hostel with a good sized bright private room (shared showers) for about $15/night. And there's lots for people to see just by walking around town.
Osaka was cool. I'm very happy in Tokyo - there's just so much here. But if I had to, I could "get by" in Osaka.