Wondering if anyone has a recommendation for a fun place to stay in Spain with a nice cheap hostel or guesthouse where I am likely to meet other travellers?

Let me be the first to say...

You'll have to be more specific!

I'll make my first trip to Spain this December so I can't give any info based on experience - only based on a month of research on southern Spain (hostals, trains, etc) and the suggestions and opinions of the fine folks here.

Tell everyone which cities/regions you're interested in and you'll get loads of help. Good luck!