I stayed in the Huertas area in 1998 and this summer, 2004.
No problems whatsoever, walked and metro-ed around at any time. Well, until midnight at least - I am an old delicate woman, see .
No problems with finding places to stay. ( I just walked into one of the plenty pensiones and got a v small but neat room for 15 € per night.)
Later this summer I stayed on Calle Hortaleza, no problems there either, however the area felt a bit more dodgy, but nobody hassled me or anything like that.

I stayed with some friends in a hostal just off the Gran Via 2 years ago, and we didn't have any trouble at all. didn't see any trouble either. I spent the whole time walking around thinking "I could live here, I love it".