Stayed here for 2 nights as part of an organised tour in December 2012.
This was an organised tour so we didn't have a choice of where we stayed but our stay at Wombat's was great. Check-in was really quick - to get your key, they ask for a form of ID as deposit (either any photo ID or a photocopy of your passport + €5, rather than your actual passport just in case you forget to pick it up again!). You need your key to access the front door of the hostel, the laundry room and your hostel room. You also get a welcome pack, which includes a map, breakfast vouchers (if you've paid for it) and some fake money, which you can exchange for a drink (small wine or small beer) in the rooftop bar.
We were in a four-dorm room, so had two bunk beds, a storage unit with 4 lockers (you need your keys to lock these, as the push buttons on the lockers respond to a certain key card - ask in reception!), some small chairs and a table. Each bunk has a small shelf, with an individual light and power socket on it - this is a really great idea, as you can turn the main light off and leave these on (either for yourself, or for others) so that you don't disturb people if you come back late. We were provided with bed linen and a towel each too.
The room was a good size with plenty of room for four people's stuff. We were near the end of a corridor so didn't hear any noise during the night, nor from adjacent rooms. There was a building site opposite the hostel and they started drilling a bit early one morning - the window was double glazed but we'd left it open as it was a bit warm and had to be up early anyway so it didn't matter. Plus the view from the room was pretty spectacular (see the photo of the Berlin TV tower or Fernsehturm Berlin).
The bathroom was a good size although the shower was a bit on the small size. Having said that, there was plenty of hot water and good water pressure.
Breakfast is in the adjoining restaurant and although there wasn't the largest selection, the food on offer was good. There was bread, bread rolls, cheese and cold meats, a selection of jams and spreads, cereals, fruit and tea, coffee and juices.
There's free Wifi available downstairs in the lobby - we did have real problems with the connection speed at peak times (it seemed to be one guy was able to use Skype and the rest of us couldn't do anything, not even send an email!) and it meant I just went back early the next morning. The signal strength itself wasn't an issue and there are also fixed pc's that you can use. You can get to the roof-bar by using one of the lifts and there was a great atmosphere up there, would be really sociable if you're travelling alone. Drinks were well priced and the others in our group who ate up there said it was good. All the staff were friendly and spoke great English.
Location-wise, the hostel is in a good position, close to Rosa-Luxemburg Platz U-Bahn stop (2-3 mins). It's about 15-20 mins walk to Alexanderplatz too.
Overall, I wouldn't hesitate to stay here again if visiting Berlin as, apart from the wifi bandwidth issue, it's very hard to fault this hostel - it has a great atmosphere, great rooms and is in a good location.