JUST returned from Spain. We stayed at a great hotel in Granada, right across from the Puerta Real---10 minute walk from Puerta Nuevo (where buses go up to Albaicin or to Alhamabra). It cost around 53 Euros, and we booked it through -----------. It even has a queen-size bed, which was really unusual for most of the places we stayed in this price range).
Excellent staff (they helped me cancel a night at another hotel, sent faxes no charge, no charge for telephone calls that were local). They have a place for breakfast/lunch as well as a bar, although there are hundreds of places all around it also.

Good-sized room, and QUIET (we faced the street behnd Acera del Darro, which was the main street that the hotel opens onto).