Well, been there done that. 3 weeks, *Great* time!!!!!
But on topic, I whole heartedly recommend Hostel Meridiano
First, friendly helpful hosts as previously stated. Great accomodations, everything is new. Free internet access. Quiet. Great rates.
Location is ideal. Centrally located, you can walk everywhere interesting within a half hour tops.
Being next to a police station is kinda nice. Also next to a nice park, which has reserved parking for the police. So there's a 24/7 police guard walking the location. It was always nice to sit in the park after a long day regardless of the hour not worried about "security".
Next to the Meridiano is a great tapas bar. It became one of two favorites for the tapas.
Friendly, new, afforable, perfectly located, secure, with its own park and tapas bar.
You won't be disappointed.