As I prepare to go back to Pamplona and San Fermin for my fourth visit, I can only say that it is something not to be missed. It is one huge, drunken party, but there is also a sweeter family side to the whole thing (children chasing the "Giants", whole families dressed in white with red panuelos headed for the the midnight fireworks, obvious civic and Spanish/Pamplonese/Basque pride when giving the confused foreigner directions or advice about what to do next).
Having attended three Ferias and drunk my share of Pacharan (plus at least a partial share of everybody else's) I can honestly say I've never seen a single fight or hardly any words spoken in anger during San Fermin.
The entire atmosphere is one of such conviviality that I believe you could just lay down next to a group in any of the parks and sleep safely ( please do be cautious however, especially if you are alone or especially intoxicated). If you are adventurous, I think it would be relatively safe and certainly cheapest to sleep in any of the city parks (especially near the Tres Reyes or near the Ciudadelo). There is a public bath (on Eslava I believe)so you can take a shower. You can leave your luggage safely at "left luggage" spots around the city, including the train station and the bus station. If you do get a room, you won't spend much time there.
As far as the run goes, I agree - the most important thing to remember is IF YOU FALL DOWN - STAY DOWN!!!! and cover your head. Don't even move until someone taps you to let you know it is safe. I was there in 1995 when Peter Tassio was killed when he jumped up after falling. He was the first and only American ever killed in the encierro and the first person killed in the encierro in over ten years.
Also, try not to run on a weekend (especially Saturday) because that is when the course is most crowded and you are in greater danger from your fellow runners than from the bulls.
Just make sure that you do it. Run! There is nothing like it. You will always have pleasant memories and you might just get hooked (in the figurative sense, I mean).
Viva San Fermin!
Gora San Fermin!