I'm in Australia at the moment & it's pretty safe where ever ones goes (common sense prevails) & all the major cities & tourist spots have cheap self contained backpackers hostels.
I echo what Blouspook is saying. Like in Australia, use your commonsense and do your research before time. You will be informed which areas is considered a no go. Yes, crime exists but you do not get mugged around every corner at all and yes, there are quite a few guest houses and very affordable hotels in just about every town. You will enjoy your time in South Africa and you will talk for years to come about your great experience.
Yes, there are many good and affordable back packers around and it is safe as long as you use your common sense, don't come here with a liberal attitude in which natives can do no wrong.
Personally I would not go back packing, it is pretty low class if you ask me, sleeping in lice infested communal quarters.
South Africa is a backpacker's paradise...sure crime is high and common sense precautions should be taken but there is just so much to explore and I would encourage you to visit.
Backpacker accommodation is widely available and relatively cheap compared to other accommodation and they are concentrated around the more popular tourist attractions.
Exchange rate is also in your favor which will make it even cheaper.
Check out this site for more info. there are many others,just google
The Real Rougue is a real piece of work. SA is one of the best countries in the world to backpack. Backpackers hostels all over the show - wouldn't have been the case if what Reale Rougue barfs is true.