It's ok. Basic 'hotel-style' hotel if you know what I mean. But clean and everything in good order. Central in town, near shopping streets, but not near the Alhambra. If you want to be near the Alhambra (but you'll be pretty isolated for everything else) try the Hotel Alixares
www.hotelesporcel.com. A large tour-package style hotel, but good value for what you get and the location. About 100 euros for a double but i think they give big discounts if you haggle or search on the web for offers. Or as a compromise try the Hostal La Ninfa (958 22 79 85) (about 50-60 euros a double). It's inbetween town and the Alhambra, near restaurants and bars on the Campo El Principe.
Or the nearby Hostal Suecia. In a quiet leafy cul de sac. However, not some of the rooms are pretty poky - it's so clean it smells of cleaning fluid, and although it's quiet outside, the soundproofing inside isn't so great. About 50 euros a double.
Otherwise try any of these hostals in town: Hostal Marquez (hostal-marquez@ozu.es, about 40E double); Hostal Meridiano (about 40E double); Hostal Arteaga (30-40 double); Hostal Mesones (35 double).
Sorry - you'll have to do web searches for contact details. And double-check the prices. With all of them it's best to try and specify the type of room you want. And ask if there's any road works going on as there's a lot going on in Granada at the moment (another reason to stay near Alhambra!)
But my best choice of granada hotels is Casa del Aljarife (about 90 double) it's in the Albaicin so not near the alhambra or that near town, but it's lovely! a bargain at the price