Well, I just got back from spending a week in Madrid. First of all, let me thank Madridman and everyone on this board for the help/comments/tips prior to my trip. I used the various posts/search/website to gather lots of useful info before I decided where I was going to stay and what to do.
Since my girlfriend is studying in Madrid, it made it easier to get around since she knew what she was doing! I first want to comment about

Hostal Chelo:
-great location, off of Gran Via, few min. away from Puerta del Sol.
-very nice family, really friendly and knowledgeable
-room is clean and comfortable, bathroom also clean, only I didnt have a window..no biggie though
I also stayed a night at The Palace, and Occidental Miguel Angel.. both are really excellent, good service, and comfortable room and amenities. Plus, using bancotel checks, I used 3 for the palace and the remaining 2 for Miguel Angel.. overall a good deal.
Bancotel was easy to use and I never had a problem. I bought the "talones" or checks at a travel agency in Madrid. This way I didnt have to pay for shipping on them. Remember you have to pay seperately for the IVA(tax) plus breakfast or whatever else you spend while at the hotel.

We also made it to San Sebastian(northern Spain) beach city. It was the most beautiful part of my trip- I liked it better than Madrid! Ive always been more of a rural guy than city, so the drive up there was gorgeous. I rented a car and drove the whole way back/forth. Spanish roads are well built and promote fast driving(plus I have a heavy foot). I must say this whole trip was the best vacation Ive ever been on. Madrid has lots to offer, I wish I couldve stayed longer. I loved the food and drinks, nothing beats buying a beer or wine cause its cheaper than a soda! Well, if any questions let me know, thanks to everyone and this board for all the help,

Emil

ps: the metro is excellent. With a map and some brain power you can get just about anywhere in Madrid for much less than a taxi.