Cheapest diving in the world -- that's the best way to sum up the island of Utila. If you survive "the vomit comet" (one of the two boats that run to Utila) upon arrival, you have to get past the crowd of local tuk tuk drivers. Then you can begin your search for the cheapest Utila hostel or dive centre, which are usually a two-in-one combo. The one road at the edge of the water has more than enough options, so you can shop around until you can find the perfect place to suit your needs -- diving and sleeping. You can get open water and advanced courses, usually with a few nights' accommodation thrown in for free.
Utila is definitely a diving island -- everything revolves around diving. The shops close in the middle of the day so they can dive for a few hours. Utila has a very laid-back and social vibe. Everyone is very friendly and speaks English, which can be a nice change if you're not quite fluent in Spanish yet. Restaurants are everywhere on the main strip; there are also street food wagons selling the local specialty, "baliadas" and all over, the food is great and cheap. If you feel like having a few drinks on this little island, you will have no problems finding a drinking buddy, or a bar -- the best is ten minutes out of town, just follow the people with the bar's shirts on (you get the shirt by having four of the local rum shots called "Guifiti"). Maybe write down the address of your Utila hostel on your arm before you leave! If you're a traveling diver on a budget, Utila should be number one on your priority list.