First of all, congratulations for this great site. Thank you, MadridMan!
I stayed at Hostal Bianco for two weeks in October and yes, it's all truth about the hostal being nice and clean, well located and etc. But something must be done about their booking system. I booked a single room by e-mail two months in advance. Two weeks before traveling, I e-mailed them again reconfirming, just in case. The reply stated that it was OK.
In the afternoon I got there, much to my "surprise", I was told by the chambermaid (the only staff person that was there at the moment) that there was no reservation in my name and they were full. I showed her the e-mails (which I luckily had them printed) confirming my reservation. She said the e-mails seemed to be right, but nevertheless my name was not in that A3 sized piece of paper, in which the reservations were hand written. I asked for the person in charge of the e-mail booking. After some phone calls, the employee told me that it was "la hija de la señora", which probably had forgotten to send, from wherever she was, a fax with my reservation to the hostal. Then I realized that there were two booking systems, located at different places and with communication problems between each other. More phone calls (whose content suggested that it was not the first time things like that happened) and I was finally led to a double room for the night (sigh!). The next day I was relocated to a single room, which I kept until the end of my stay in Madrid.
Bottom line: Hostal Bianco accommodations are nice but be sure to confirm your booking BY PHONE and do not forget to record the name of the person you were talking to.