went to Montevideo for a couple of days from Buenos Aires. We stayed at the Hotel del Palacio after reading a few good reviews on trip advisor. the Hotel is ideally located at the edde of the Old town and a couple of minutes walk from Plaza de independencia. Nice little hotel with a beautiful antique lift. we arrived late but the staff was very nice and found two rooms for us. we had room 67 96th floor) which has a big terrace and a great view. the room was USD32 for a double room, we had our own bathroom and a shower with good pressure. room was basic with tv . it was clean and the staff was very friendly. there is a club on the other side of the street so earplugs might be necessary if you stay on the street side. No breakfast included but there are plenty of nice coffee places in the old town a couple of minutes down the road. Do go to the mercado del puerto (go inside instead of eatin at outside restaurants) where there are fantastic places to eat meat for a very low price. try the Tannat red wine, tannat is a grape which is solely grown in Uruguay

Stayed in the Superior Room on the Bartolome Mitre side of the hotel., I'm sure the room on the back side wouldbe quieter., but we were lucky to get this room. No Air Conditioning, just a ceiling fan was fine for us, at the end of March, but could imagine the hotter months, not so comfortable. With all the balcony doors closed and the bethroom door, it was nice & quiet, but in the bathroom with the adorable oval stained glass window opened, it was so loud on a Thurday night, must've been some party about 3am.
Location was great, obviously really close to all the bars! Right off the Sardini, walking mall, so lots of great little shops, etc.
Safety-wise we had no issues, but we warned not to go out at night around Ciudad Viejo.