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Step 1
Book your hotel room at least 8 months in advance. This may seem extreme, but trust me on this. Those hotels book up fast. The festival itself books blocks of rooms which it then makes available to official attendees of the festival. There are several affordable hotels in downtown Austin if you get to them early enough. Book the room for the length of the festival just in case. You can always call to shorten your reservation after you buy your plane ticket.
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Step 2
Stay downtown. Sure, you can get a cheaper hotel further out of town, but you don't want to. The Austin bus system is pretty unreliable and you're going to need to be able to get places on time. Cabs are expensive and will be in short supply (as will parking, so forget about renting a car). If you stay downtown, everything will be within walking distance. Besides, if you're on foot, you will be better able to take advantage of the copious free booze.
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Step 3
Book your plane ticket 4 to 6 months in advance. Again, this may seem unnecessary, but believe me, the airlines are aware that March is a high-traffic period for folks traveling to Austin, and they definitely inflate their air fare as a result.
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Step 4
You don't need a pass or wristband. To get a wristband at the normal price, you must be a resident of Texas. They sell out in a matter of hours and then start popping up on Craigslist at extremely inflated prices. Passes are also expensive and hardly worth as an out-of-pocket expense. If you want to go to the trouble and/or expense of getting these things, you certainly can, but it's really not worth it unless you plan on going to 10 shows or movies a day. You may think you will do that now, but once you get there, you will be surprised at how overwhelming and exhausting is can be. Besides, you can get into almost any show or movie if you are just willing to get in line early and wait.
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Step 5
Bring a book. Without a pass or wristband, you will be waiting in a lot of lines. For a long time. Bring a book or some cards to play with your companions. It will help pass the time.
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Step 6
Free stuff is everywhere. You just need to keep your eyes peeled. Ordinarily, I am trained to ignore people who stand on the street and hand me stuff, but not at SXSW. Almost everything they are handing you is something free that you want from t-shirts and CDs to invitations to promotional parties. There are always free drinks at those parties and often free food as well.
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Step 7
Be informed. During SXSW, Austin explodes with art, music and cinema, and not everything is officially affiliated with the festival. Often, a band you really love (or don't yet know that you really love) will be playing for free somewhere. If you can't get in to the semi-secret Shins show, you can check out another band nearby that just might blow you away. There are several informative websites listed at the end of this article that provide the low-down on all the SXSW happenings.
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Step 8
Make a spreadsheet. Even if you aren't the type to follow a schedule when on vacation, you're going to want to have a spreadsheet here. There are just too many amazing movies and bands playing at any given moment to keep track of it all in your head. You don't have to follow the spreadsheet to the letter, but you are going to be glad you have a way to quickly see what all of your options are at 3:00 pm on Tuesday.
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Step 9
Be flexible. It's a sad fact that sometimes you can wait in line for two hours to see your favorite band and you still can't get in. Even if you have a wristband, you might be turned away or told that the band has canceled. There is far too much going on at SXSW to let this put a damper on things. Make sure your spreadsheet has lots of options for each time slot and move on to the next thing. Or just follow the sound of music. It may lead to your new favorite band.
