My daughter and I were in Brazil for about 4 weeks last April/May. We both loved it!!
The locals exhibit a fair amount of concern about safety in Rio. There is reason for that. But I was out at night and never felt very worried nor did I have or hear of any problems. But do use some caution.
We were in Rio for a few days (not enough but saw the high lights). And traveled down to Iguzu. It is very beautiful. We spent 3 days there. However, 1 day is really enough to see the better part of it. The Argentine side is better than the Brazilian side.
We were on a Gap Adventures tour so we were in middle/lowish hotels but not as cheap as hostel etc.
Iguazu is a l o n g way from Rio. We were on buses (cheaper way) and we were a few hours down the coast to Paraty (lovly little town) over night there (2 nights) and then on the bus for over 24 solid hours to Iguazu. I don't think there is a cheaper way. Brazil is very big for only 2 weeks. Very big.
Can't help you on guidebooks.
Hotel Bandeirantes, was the hotel we stayed at. It was fine but I think well over a 100 $ (not reals) a night regular rates. There is an internet cafe nearby so you can keep up with EvC and more than one lavanderia (laundry service) nearby (generally do NOT use the hotels they charge way too much).
Rio is a cidade maraveloso (marvelous city). Unbelievable setting.
We went on the Rocinha favela tour for a few hours (about 70$ as I recall). It is the largest slum in latin america and an interesting experience. Well conducted.
Of couse you should go up Pao de acucar (sugar loaf) and Correvado (where the giant christ statue is.) Magnificent views!
We also spent a few days out deep in the Pantenal (the worlds largest swamp) and a couple of days in Bonito ( in a wonderful country setting). Ouro Preto is an hours plane ride and an hour or so's bus ride from Rio and is a fascinting old colonial town. But 2 weeks isn't very long.
You will LOVE the bikinis on the beachs of Rio.