Yes, the new regulations change the easy old way of "buy" a business visa and the company does a quickie registration. Now you cannot register unless you include an official document filled out by your landlord and signed by him/her at the new office (sorry, can't remember the name of the place). A lot of street smart foreigners can get around this with a few dollars to their friendly neighboring babushka for a little excursion and a few white lies. But a young guy like dogboy is a sitting duck for all the scam artists, no matter how good his Russian language skills. Also there are plenty of internet scam artists who take the cash, and even if they do get you the visa they just point you to OVIR and say you are on your own for registration.
And since hotels are expensive, restrictive, and boring I think dogboy would have a lot more fun in a situation where he can be independant and hang out with people his own age. The dorms are enough of a cultural challenge for a new visitor, go for the dangerous adventure on the second trip.