Priceline works great in London
I haven't tried it for Paris, but I can tell you that the "bid for your room" function on Priceline works really well for London. The last two times we've gone (around Thanksgiving and in August) we've been able to get a room for $125/night incl. svc charges. The first time, I had to check twice, because I couldn't believe it was 125 dollars and not pounds. (We bid the room at $100-110 and they then added on all of the "extra" charges).
Both times, we stayed in the Kensington Park area, about a 5 min. walk from the Gloucester Park tube stop (one up from Kensington Park). This is a safe, relatively quiet, and upscale location and you are on the Circle and Picadilly lines tube lines. Both run right through central London (two or three stops down) and the Picadilly is the line that goes to Heathrow Airport so you don't have to transfer to a different line while schlepping your luggage (some of the underground stations don't have escalators, only stairs, so this can be a pretty big deal depending on how heavy you packed). The hotels we stayed at were big and rather soulless (a Holiday Inn and the Millennium Gloucester) but hey, for a decent, well-located room/private bath in central London at a $125/night, who cares about that. The room price did not include breakfast, but there's a fantastic French pastry shop and plenty of other little cafes right there.