I was in Tokyo many years ago now, but am heading back this fall. What season are you planning on going? Summer is very hot and humid, the Fall (Sept/Oct)can be quite wet, and Winters are cool (although above freezing for the most part). We will be there in Nov - average daily temp is the mid teens (C), which is MUCH better than what we are normally used to for mid Nov. at home. Spring/late fall are generally considered to be the best times to visit.
Tokyo is crowded and busy - but so are alot of cities. Don't let that put you off.
Tokyo can be expensive - however, if you like Japanese food, it is possible to eat relatively cheaply. Hotel restaurants are very pricy, as are some of the top end restaurants. Convenience stores (seriously!) like 7-11 offer pre-packaged meals that are decent and reasonably priced. Many restaurants also have large displays in their windows of the meals being served, which can help with the ordering process. If you can't read the menu, you can always point at what you want! Western style food can also be found on the cheap - and is becoming much more prevalent.
Shinjuku is amazing. When I was there, we were put up in one of the hotels in the area. If you are looking at saving money, you may want to see what is available in terms of hostels in or around the area.
While Shinjuku seems to come alive after dark (including some of the seedier areas, which are still safer than some areas of North American cities during the day - still, use common sense), there is a fair bit to see and do, plus Shinjuku station and the subway system (fairly well laid out and easy to learn) can get you almost anywhere you might want to go. The subway lines also will accept pre-paid subway cards (Pasmo? card, IIRC) which make using the system easy (and save fumbling for the correct change).
Highlights:
The Imperial Palace and Ginza (especially at night)
Akhibara - great if you're into Anime or electronics
Shibuya
Asakusa Canon temple
We are also planning on seeing Tsukiji Fish Market, the Tokyo Aquarium, and the National Museum in Ueno Park this time around.
In terms of planning - get a decent guide book and a copy of the Tokyo City Street Atlas. The guide book should give you ideas of what to see, the street atlas will help you find it (pretty important, as Tokyo's streets are not always marked).
HTH