Melissa T.
Yelp
It's highly rated on hostelbookers and I can see why - it's right in the middle of the center, very easy access from the main metro station, Sol. Reception is incredibly nice, friendly, and speak English well. The rooms are kept very clean, although keep in mind this is a hostel, not a hotel, so rooms were smaller.
Being in the middle of the center, and in particular, right next to Museo del Jamon which is open late hours, it can get a little noisy.
Otherwise, I would highly recommend this as a low budget travel option.