I actually already mentioned the hostel, but as it's so generic, I don't blame you for missing it
This is the Hostel - Hanoi Backpackers. For the record, if you use hostel.com as opposed to hostelworld to book, you can save the booking fee.
http://www.hostelworld.com/hosteldetails.php/Hanoi-Backpackers-Hostel-Downtown/Hanoi/46381
http://www.hostels.com/hostels/hanoi/hanoi-backpackers-hostel---downtown/46381
Eating in there is relatively pricey, but tasty. Ma Mai is a great location to explore Hanoi. I'd skip the puppet show.
As a word of caution, don't even think about taking a tri-pod or related equipment on the castaway island trip. It's probably worth clarifying that I'm in my mid-20s and consider myself to be a very outgoing person. The sort of environment I'm advocating might be very abrasive if you are much older or just want a relaxed time taking picturesque snaps. Despite that, I'd say screw it and let your hair down.
As for Sapa, it's very weather dependant. I'm sure you already have the lonely planet guide, but if not, get it. Vietnam has crazy seasonal changes and Sapa is prone to nightmare rain. I'm not sure if this is the death season for it! I'd say one night in sapa, with a night on the train there and back, is plenty. You'll get a good 6 hour trek, some nice rice paddies a good time. I arranged to go there by myself but as I went from Hannoi backpackers, I realised a small squadron was going along from the hostel on an organised tour at the same time. There was a very amusing moment where after 5 new friends waved goodbye and left me on my lonesome, I jumped off the moving bus to reunite and tag with them

So you can organise a short tour from HB, but you can do it cheaper. Personally, £40 here or there isn't worth the faff or the risk of loneliness.
Post sapa, you can either jump straight to HCMC or stop off at Hue / Hoi Ann / Nha Trang. I will warn you now, the night buses are horrendous unless you are a good sleeper / have been to a local pharmacy. I'd say of the above, Hoi Ann is worth a night or two, maybe more if you want a suit made (pay for the best quality they do). Otherwise, Nha Trang is totally skip-able unless you want to be reminded of Benidorm.
HCMC is definitely worth a visit. The war museum and the tunnels are amazing. The mekong delta is worth a day trip, but I wasn't overly enamoured or desperate to do more. As I suggested earlier, if you can get over to Ankor Watt, definitely worth your time. My snaps of AW:
I really am such a lucky sod.