Back in 1998, when the internet was a slow-moving, exotic beast, an earnest American colleague in a now-defunct new media consultancy breathlessly told me about Priceline. It didn't just sell flights, he explained. It let you bid for them. It had a Unique Selling Point: you could Name Your Own Price [TM].

It was a neat idea, I conceded. You type your credit card number into the site, pick the route, and place your bid. If Priceline finds tickets at or below that price, you must accept them. So when the company asked me to bid for a flight to New York and a hotel in the city, I was intrigued, but rather sceptical. Wasn't this just a way of filling seats on unpopular airlines at antisocial times?

I began with a decidedly cautious £100 bid - taxes and booking fees are added later - which Priceline immediately rejected as too low. Obviously I would have to raise my game. I agreed to bid £120 and waited, with a flutter of excitement, for the verdict.

Fifteen minutes later, a coyly worded email arrived. "Although we couldn't find tickets that matched your specific request, we did find an alternative option that might work for you... We found tickets that we could have booked if your offer price per ticket was £24 higher."

Fair enough. £144 and the extra charges added up to £217, which is a reasonable price for a transatlantic flight. I accepted, hoping the flight wouldn't involve a change. Even on popular routes, Priceline doesn't guarantee a direct ticket.

"Congratulations Rosamund Taylor, your price was accepted! You got your price of £144.00! By using priceline, you saved 90% - a total of £2022.00 - on the total cost of your ticket when compared to the lowest published fare available (at the time of booking) for the itinerary and airline shown below."

Oh, come now. Very few tickets are ever sold at the published fare. We both knew perfectly well (for by now I was imagining the excitable author of Priceline's emails) you could find a return to New York for a tenth of that price on Expedia, or Ebookers, or Travelocity, or Opodo. (Curiously, American Airlines and Virgin both had cheaper, direct flights to New York on the same dates).

But the real disappointment came in the detail. I would have to change planes in Pittsburgh. Pittsburgh, Pennsylvania? Pittsburgh, the city lying 318 miles west of New York? And I would not be enjoying the seat-back TVs and relatively generous legroom of a BA or Virgin Atlantic plane. I would be flying US Airways, which filed for Chapter 11 protection from its creditors in August. It shows.

Priceline insists this is a "very rare" and unfortunate occurrence. And if you don't mind propping up an ailing airline and catching a connection by six minutes (thanks to delays at Gatwick), Priceline may suit you very well. Fortunately, the plane was empty enough to let me curl up on a double seat without undue guilt.

What kind of hotel would Priceline come up with, I wondered? A Holiday Inn in Queens? A Best Western in the Bronx? Much to my surprise, however, the site turned out to be rather better at booking hotels than it was at finding flights. A map was provided. Did I want to stay in SoHo, or the financial district, or the Upper East Side, or Midtown? Actually, I didn't mind too much, but it was good to be asked.

What class of hotel did I want? Five-star, obviously, but I would try for a four-star and see if I got lucky. A £90 bid (again excluding taxes, state charges and a £5 admin fee) was rebuffed. I duly gave in, as my budget was running low, and bid £80 for a three-star. I had forgotten just how expensive New York hotels can be.

Priceline came back with a two-star for £80 and the offer of a three-star for £95, providing I booked within an hour. Well, it was a long flight, I reasoned, and I deserved a decent bed and a large bathroom when I finally arrived.

The hotel turned out to be a 1928 art deco skyscraper in Midtown East. The Beekman Tower Suite was a pleasantly discreet and slightly old-fashioned place, with a cocktail bar on the top floor and mullioned windows. The TV was suitably large, there was a kitchen and a fridge - which, had I been sharing the room, would have been ideal for chilling some champagne - and, best of all, the kind of North American shower which could drain a British water tank in seconds. Priceline clearly had its uses, even if booking air tickets wasn't one of them.

· Ros Taylor travelled to New York with Priceline. Three nights at the Beekman Tower Suite hotel and return US Airways flights from Gatwick to New York via Pittsburgh cost a total of £540.12, including taxes and fees. For Ros's account of her trip to New York, click here.