Hostel in Munich
 

I am looking for a clean hostel with single room in Munich that would be close to the train station so that I could catch an early morning flight back to the US.

Have you checked out www.hostels.com? It's a great resource with descriptions of hostels and ratings by those who have stayed there. You can even book your hostel for a small fee. My kids used that site last summer to find a hostel in Munich just as you described. Here's four hostels they found on Hostels.com in Munich, but I don't remember which one they eventually chose:
www.wombats-hostels.com
www.meininger-hostels.de
www.euro-youth-hotel.de
www.easypalace.de

Has anyone stayed at Inter City Hotel, it is at the train station.

The Inter City hotel in Munich is a good choice near the railway station.
Have stayed there 2 years ago and i would recommend it without second thoughts.

It should be quite a difference in costs between a hostel and the Intercity Hotel?

If you are concious about rates and location you could also check out this new hotel in NW Munich
http://www.letomotel.de/en/home

It would not be a perfect location for a regular tourist, but it's literally next door to a S-Bahn station of one of the lines which go to airport. Takes bit more than 30 minutes from there. And around 10-15 minutes to the historic center by S-Bahn or subway, the latter being also next door to the hotel.

Hey, what about Euro Youth Hostel or Wombat near central Station. It's difficult to get a room there during Oktoberfest, but try it!
Here on my blog on
http://muenchen-sehen.com/2013/08/19...-fur-urlauber/ (german)
you get more information. These information are also for those who are travelling right now to Munich!