Ulan Bator or Ulaanbaatar is the capital of Mongolia.
At the bus station you'll find people trying to fill up their cars with passengers. If you're lucky they won't be able to, and will take you for free. Or you can buy a bus ticket to the first town (but buy early and make sure you have a seat or you'll be sitting on the floor).
On Peace avenue (main road, and trunk road going west) are most of the cheap hostels. Khongor guesthouse is very decent and cheap (3USD). It's a 3 minutes walk east of the state department store on the northern side of the road, but the entry is from the back. Zaya guesthouse is also very close.
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