Quillabamba is a city within the Southern Sierra of Peru. It is the capital of La Convención Province, which is the largest province of Cusco. It is located in an area called the higher jungle. Agriculture is the most important activity, principally coffee, cacao, tea and coca. The town is a mixture of Andean and Amazonian migrants.
Daily Buses run to Quillabamba from the Santiago terminal in Cuzco (7-8 hours, ~ 4US$) via Santa María. Turismo Ampay is the recommended company to go on this trip with. Other destinations are Ivochote (12-14 hours) and Huancacalle (4-7 hours).
Combis run from Santa Maria to Quillabamba.
Mototaxis are how you get around in Quillabamba. As of May 2013, it was 1.50 soles to get from anywhere to anywhere in town, although it is good to confirm this before getting in.
Ask a taxi driver for a local guide, they can take you to see some beautiful waterfalls in the jungle. Along the way you will pass beautiful wildflowers, shade coffee trees, and oranges you can eat off the tree. There is also a small zoo about 1/2 hour away, which can be combined with a day trip to the waterfalls.
Sambaray. Sambaray is a park a little ways from the center of the town, on the banks of the Urubamba. Get a mototaxi to Sambaray. There is a small zoo with a jaguar, spider monkeys and so on. There are two swimming pools is excellent condition, and it is 1.50 soles to get in. There is a small café nearby.
Siete Tinejas. This is a series of seven waterfalls near Quillabamba. To get here, you have to first go to Echarate. Get a mototaxi, asking for the bus stop for Echarate. Then get a combi (about 15 soles as of May 2013) to Echarate. From there it is short walk away.
La Balsa. La Balsa is an interesting spot on the banks of the Urubamba. Get a mototaxi. The driver may not know the name of the spot, so ask for the park beside the river. A short walk downhill from the end of the street leads you to the riverbank. Locals use this place to float down the river in an inner tube, to bathe and wash their vehicles. It is a good place to relax and spend an afternoon.
Sircadia Ecolodge. Sircadia is an eco-lodge created in the cloud forest above Quillabamba. The owners have purchased large tracts of cloud forest to save them from logging and they plan to purchase more. Sircadia welcomes guests for a unique experience. Working on the farm is expected, but not compulsory. There is no electricity (bring a flashlight!), but a waterfall supplies clean water, and there is an outhouse. The rooms are warm and comfortable. There is scenic cloud forest, waterfalls, and a peaceful jungle environment. Meditation is done twice a day, for an hour each time, but it is not compulsory. The lodge is high up in the forest. The guest pays for the taxi (30 soles as of May 2013) to the trailhead. Then it is 2-3 hour climb (steep, but scenic), which is worth it. The food is 30% grown on-site and 70% imported from Quillabamba. For those looking for a fresh, non-touristy, calming experience. 
There are plenty of cheap hostels in town. Ask any cab driver.
Hostal Cusco, Jiron Cusco. This is a clean, friendly and cheap hostel. The owner Elizabeth is friendly. About 30s a night. Strangely, the toilets have no seats on them. But on the whole a good place.
Hostal Plaza de Armas, Plaza de Armas. Cold water, toilets don't work, rooms with no ventilation except huge windows that open to the outside, so other guests can look into your entire room as they pass by. Cheap, 20 soles, but grumpy staff and cold water only.