Lille -- with its quaint pedestrian shopping center, plethora of things to do during the day, and a great nightlife to boot -- is definitely worth a stop for a few days at most. It has a small-city feel with plenty to do and is a terrific stopover on the way to Belgium. The city is small enough to get around on foot with little difficulty; if walking isn't for you, they have a small metro and terrific bus system. There is a considerable amount of shopping available on pedestrian streets -- the streets are buzzing with locals. If you are looking for something free to do, the zoo is pretty great -- it has everything from zebras and pandas to a reptile house. The old part of town has a lot of character, with small boutiques and cafes. The pubs are very reasonably priced and there are plenty of discos as well.
There isn't much in the way of hostels in Lille -- what exists is about a fifteen-minute walk from the train station; it's out of the center of town a bit but that's ok, because the town isn't too big.
Beware that while Lille has some homeless beggars, which can detract from the vibe of the city, it is still worth a visit, especially if you are looking for a more genuine French experience -- it is not too touristy. With plenty to do at reasonable prices, Lille is a great place for someone looking to try great French cuisine and enjoy a city with character.