Istanbul - Cappadocia
Getting to Cappadocia from Istanbul is pretty straightforward. I took a nightbus twice. The bus was not full, so you did have some space to sleep. Make sure you have a sweater or sleeping bag at hand. It might be hot when you leave, but at night it can get cold, especially if they put the AC on.
From Istanbul you can get dropped at any destination in Cappadocia, even the smallest village like Uchisar is OK.
Where to stay in CappadociaUchisar
I strongly advise you to go to Uchisar. This is a marvellous little village which is situated on a hill. This means that from most hotels, you have a really fantastic view over Cappadocia. Sunrise is really great.
Uchisar is also a good place to start some marvellous walks.