A friend and I travelled around Spain for a few weeks in August. We stayed at Pension Meridiano in Granada.
http://www.hostalmeridiano.com Calle Angulo, 9, Granada Phone/Fax 958 250 544
I don't have enough positive things to say about this place. The staff was really helpful and friendly, the rooms are clean and quiet, there is internet access, the hostal is centrally located (close to the Albacin and within walking distance of everything). AND... it was reasonably priced.