Puno is a border town between Peru and Bolivia. If you want to get from one country to the other without flying, you will stop in Puno because it is a mandatory stop-over at the center of a large bus network.
While you're in Puno, you should take the opportunity to explore. Puno has a nice historical center with a classic square around a colonial church. It is also the main harbour for cruises on the world famous Lake Titicaca. Spending a day on the lake is a fantastic experience, with a variety of scenery to be enjoyed including manmade floating islands. Another big attraction of Puno is its Carnival happening in February. Make sure you check the exact dates when you book your Puno hostel. It is the largest such celebration of Peru with hundred of music and dancing bands coming from all over the country to perform in the streets. If you want to fully enjoy Carnival, make sure you book your hostel in Puno well in advance, and reserve your seats in the streets of the carnival. If you don't reserve seats, you can explore the free main parades and other impromptu shows on the streets and small squares, along with concerts which last all night long.
Choose your hostel in Puno either in the city center or near the harbor since both areas are lively, with many small cheap restaurants and grocery shops. Staying in other areas, including the bus station zone, can be quickly annoying since you will have to either walk a lot or take many cabs (and traffic can be very hectic, and a real nightmare during the carnival).