I spent three nights at Hostal Lido in Madrid from 18th to 21st November 2006 and I am still trying to get back from them 40 euros they overcharged on my credit card.
Hostal Lido is excellently located in a small street very close to the Prado area and Puerta del Sol: everything is at walking distance, at least for someone used to walking like me.
Rooms are cheap (I paid € 35,00 for the single), clean and basically equipped. How to say, you get exactly what you pay for; nothing more. Try to avoid rooms from 1 to 4 which are both directly on the entrance and on the street.
Apart from Saturday night, the noise coming from the street is not much; on the contrary, there’s quite a lot of noise coming from the inside (other floors and other rooms): as usual happens, this hostel has been shaped out from a flat. It was not very pleasant, however, to discover scaffoldings on the facade and work going on directly outside my room from 8 am. I don’t know why, but I wasn’t allowed to have an inside room, which I guess would have been more quiet. When I asked to change room, I was asked on my turn “Why?!” and my explanations (I speak Spanish) turned out to be unsuccessful.
I am sorry to say that the staff, far from being rude, is rough and not really helpful. I mainly had to do with a lady who spends her days in looking at soap-operas and rolling paper from big rolls into smaller ones, which you then find in your toilet. Do not forget you are just a guest at hers, do not ask for advises (restaurants for instance) and, above all, do not try to be friendly: you won’t get her!