We stayed at the El Prado Green Hotel last May, great location, good breakfast buffet. You're only a few blocks from the Prado one way, the other way is the square that I can't remember the name of, but is very lively and has lots of good restaurants/tapas bars and wine bars. You can also walk to Plaza Mayor easily. Plus, we had a nice room with a balcony and it's on a relatively quiet street. I don't think you'll go wrong if you stay there.

One more vote for Carlos V. Excellent room and great location.

Hi Meg!
Look at hotelsearch.com...They propose a lot of hotels in madrid, Barcelona...and the major cities of Spain..you must find what you need!!good luck and have a good trip! Donaldus

We rented an apartment through the Hotel Dulcinea. It was in a good, central neighborhood, cheap, very clean, large and had full cooking facilties. The family was wonderful, I think that it is reviewed by a couple of travelers on Epinions.