Hi Carole C,
I always stay at the Macarena on Cava San Miguel,8. For my money, its the best hostal in Madrid.
Its in the center of everything..and i really need that because im always in a rush it seems.
About the prices..i last paid 52 euros for a cama de matrimonio room. The amenities in the room were cable tv, in room phone, lift, balconies onto cava baja, hairdryer, toiletries, marble floors, 24hr rec and concierge...etc etc
You can see why I think the cost/quality ratio is high..
If u choose this hotel I don't think you'll be disappointed. On the street behind the hotel there is a fab flamenco bar and next door there is an amaaaaazing vinoteca/wine bar with an outrageously long wine list..
have fun in Madrid!!!