Just be aware that things will be Expensive with a capital E. €6 for a beer etc.
I stayed in the
Anker Hostel, which was pretty central and reasonably priced. I have to say that I think that Norway's main attraction is its countryside rather than its cities, but Oslo is still quite pleasant with a decent nightlife, if you can afford it. If you want to get out of the city for a day, the Olympic town of Lillehammer or the stave church in
Heddal are worthwhile destinations. The fjords are a bit too far for a day trip really, although it can be done.