A friend and I went to Geilo for 3 days in february. We wanted to enjoy the snow but didn't want to do just skiing. Geilo is perfect for this as it offers lots of varied activities: dog sledging, frozen waterfall climbing, snow shoe hikes, frozen lake fishing, etc...
We stayed in this hostel and loved it. It's a bit out of the way - with the temperatures in winter you're better off taking a cab from the train station - but it was manageable by foot still to reach the lovely restaurant at the Bardola hotel (not cheap but worth every penny and more!)
The cabins were comfortable. There were 4 bunks but it was only the 2 of us, which was plenty of space. I could imagine that on a full night it might get very "cosy"...
We went for the cheaper option of having the toilets in a separate building. By -10 degrees at night this was fun! But oddly quite manageable still. There's no shortage of heating in the cabins and common areas so no issues...
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