Seven of us stayed in Riad Dar El Souk over the previous long weekend, and had an amazing time.
We had a meal at the Riad on the first evening, and would highly recommend it as a first encounter with Moroccan cuisine. Three courses for around £20 each, and they also have beers and wine at very reasonable prices. The food was tasty and filling.
The staff at the Riad are very accommodating and helpful. We were especially impressed by Madi, who owns the Riad, and gave us a complete rundown of the touristy things we could do, best forms of transport, etc. Very knowledgeable!
Our room (my wife and I stayed in Attarine) was simple and spacious, with a very comfortable bed. The shower was great, if a little slow to drain.
The roof terrace is wonderful in the warm sunshine, and a great place to put your feet up with a holiday read, or to have a snooze on a sun lounger.
It's only about a 5-10 minute walk from the Riad to the Jemmaa el Fnaa, and it's very comforting to know that you can escape the hustle and bustle of the busy market back at the Riad.
In summary: Highly recommended. There's no better place to stay in Marrakech, especially when the room prices are low while the quality of service is high!
(one thing - you might want to take earplugs, if you're a light sleeper like me. The Call to Prayer starts about 5.30 a.m., which is when the cats also start serenading, some dogs and I think I heard a cockerel somewhere in the neighbourhood)