Aquas Caliente (hot water in Spanish) is the overnight stopping point for trips to Machu Picchu. For those that do not want to hike the Inca Trail or the Lares Trek, the only way to reach Aquas Caliente is by train. There are several train options from the backbacker train to the luxurious Hiram Bingham. They all travel the same route though the Sacred Valley and beautiful countryside.
If you would like to visit Machu Picchu in the early morning, before it gets crowded with the day trippers from Cusco, it is necessary to spend a night. There is a very wide range of accomodations available in Aquas Caliente, from very cheap hostels to very nice expensive hotels. Be sure to spend time researching your accomodations before booking.
There are no shortage of restaurants in Aquas Caliente and almost 100% of them offer some variation of stone oven baked pizza. Lots of shopping is also available here with a large market place near the train station. Everything is town is within walking distance but be aware that most of that walking is either up or down.
Some people come here expecting to spend time at the hot springs from which the town gets its name. Members of my group who went to check it out quickly returned to the hotel as they felt the area was not clean.