The most popular island for the backpacker crowd is Sunedup. Sunedup is a very small island with two separate “hostels”. Both offer identical amenities, however the owner at Sunedup Cabanas was young, friendly Panamanian who offers great tours by day and enjoys relaxing with a beer at night. It costs $26USD a night – that gives you a dorm bed in a cabana on the beach and includes all meals. The price might seem high, but the meals are delicious, offering lobster dinners, large lunches, and unlimited coffee (instant) in the morning. They can set up a return boat for the morning and have some great snorkeling tours for $20USD.
There are many islands that have small villages on them that you can visit for the day and many have small hotels or for a much cheaper price, a cabana to hang a hammock in. Many places will put you up for $5-10USD a night and have many friendly families to enjoy meals with. The best way to get advise and information is to talk to the boat captains. There are tons of boats either doing tours through the islands or on their way to Colombia and the captains are more than willing to give advise on which islands are the best and cheapest.