Aji Hostel

One of the best hostels I've stayed in. It has rooms for every taste and budget and it's located in a very quiet part of the city, but it's still really well connected to the must-see tourist attractions. They offer everything a tourist could possibly need at reasonable prices during reasonable times of day (they even held onto a package for me while I was traveling in South America for three months).
They have some attractive discounts for the ISIC card, or for stays longer than 5 days.
But the most stand-out thing about this hostel is the friendly treatment, from all the staff, and from the owners. They really make you feel at home.