I am interested in going to Madrid in early January. I am looking for an inexpensive (approximately $400/month) living arrangement (single room) that is in a fairly central location and that is at least O.K. quality. I would greatly appreciate anyone's help because I am wanting to leave in a little over a month and time is running out. Thank you.

There is a building located near Metro Quevedo that has several shared flats and houses a lot of language professors / students.
The address is San Bernardo, 119.
The rooms start at 300 euros for an interior room and 350 euros for an exterior room.
You can contact Chelo or Jose on the 7th floor Izquierda if you are able to go see the place in person.
You can call Chelo (Spanish only) at tel. 656-967-442 or Jose (English/Spanish) at tel. 654-538163 for availability and viewings.
Last I heard there was a couple of rooms available on the first floor.

Rocco, I certainly hope you're not getting a commission for this referral. That would be violating the posting rules here on the message board.

Saludos, MadridMan