We just finished taking a group of 13 travelers to Oaxaca from San Miguel de Allende and stayed at Hotel Casa Del Sotano upon recommendations from several friends. The hotel is small, clean, and has a great little restaurant in the patio. Although other traveler's have said it is quiet, I think the majority of rooms have noise. The rooms are on the small side, and the bathrooms are postage stamp size. Though located close to most things it is on a busy street. The price matches what it has to offer. Our travelers were fine with our choice, but some suggested we upgrade to a quieter hotel with larger rooms next time. The service was excellent and it was easy to make a reservation. There is an uphill walk to the hotel from Santo Domingo and the Zocalo, but for those of us who live in San Miguel at altitude, this was not a problem.
I would recommend this hotel for a couple, or small group of friends or family. It is economical and convenient.