I contacted visatorussia and got a quick answer to this question:
If you do not plan to stay at a hotel, please leave the field blank. A hotel will then be mentioned in your invitation for form's sake and you will have to indicate the same hotel in your consulate application form. This way you will obtain a tourist visa with no complications and once in Russia, you will be able to choose accommodation in accordance with your convenience.
Keep in mind that if you do not stay at a hotel and if you stay longer than 7 business days, ensure that the owner of the place you're staying at, fills out a special russian form for the government indicating where you are staying. A hotel will do this automatically for you.