Yours is a pretty broad question, Ward. Anywhere in Old Madrid you can walk to bars, restaurants, discos, museums, etcetera. It's ALL very centrally located and accessible on foot.

A mid-to-low-range hotel which has gotten good reviews is the Hotel Europa just off the Puerta del Sol, on a pedestrian street and right next to you you have the FNAC and El Corte Inglés shopping centers and there are loads of bars, restaurants, and the Plaza Mayor is just a few blocks away, same with the Royal Palace and about everything else you'll want to see. Another hotel to consider is the Hotel Plaza Mayor located just next to the Plaza Mayor. Both hotels have double rooms in the 70-95 Euros range.

Good luck and enjoy your time in Madrid! Saludos, MadridMan