If you want to enjoy your final night in Spain, then you'll be better off staying in the city, in the Salamanca district or the historic center, you're choice. And forget the free shuttle. A taxi can get you to the airport in under 25 minutes in heavy traffic, a few minutes sooner if you are staying the in the Salamanca area. You can check Maribel's Guides for her hotel recommendations. There are several good options.

run this url & substitute your dates. http://www.booking.com/searchresults.en-gb.html?sid=b110d7c91273c8cf729fde1c2c3e95f1;dcid=1;ac_pageview_id=10ea7a1141cd004c;checkin_monthday=15;checkin_year_month=2012-11;checkout_monthday=16;checkout_year_month=2012-11;city=-390625;class_interval=1;csflt={};dest_id=-390625;dest_type=city;inac=0;radius=0;redirected_from_city=0;redirected_from_landmark=0;review_score_group=empty;score_min=0;src=index;ss_all=0;ssb=empty;;nflt=district%3D196%3Bhotelfacility%3D17%3B;track_ajax_filters=1

don't click; copy the whole url & paste into browser

I, too, would stay right in Madrid at Hostal Lisboa on calle Lope de Vega. Cheap, clean, wifi, etc. with good restaurants and cafes nearby. 59€/night. Then take the 5€ bus from Atocha or Cibeles to the airport. Look up the Lisboa on Frommers or Google.

thanks! i will take all suggestions into account!

Stayed at Axor Hotel near the airport. had a shuttle service that was good. No dining room at the hotel however.Price was reasonable less than $100 Canadian.

But did you go into the city to enjoy your last night or just sit in your airport hotel room?

We stayed at http://www.hostalpizarro.eu/en/index.html. We had no problem with the area and could easily walk to everything. It was modern, clean and friendly.

Also it was cheap and we took the metro to the airport.

I second Robert's advice, stay in the center for your final night. Madrid is made for this, whether you want a relaxing evening in a tapas bar or an old world café or a full night out in a city famous for its nightlife.
http://www.esmadrid.com/en/portal.do

Robert, my flight was 7AM..Stayed in city until about 10PM and went to hotel and to bed..Good choice for me and I probably would do it again altho son stayed with me in city before his flight and took the Best Western shuttle at 6AM. I slept in and then had the time to myself before the late train to Salamanca. Wonderful place to linger longer!!!