Staying in the centre of Arusha has many advantages: Within 200m of the Backpackers you have ATMs, restaurants, shops, a supermarket. Even closer: Within the building there is a helpful safari office and a roof terrace with nice views of the city life and beyond (have a drink there, the food is better elsewhere).
The rooms are small but adequate, shared bathrooms are ok (hot water!) and other travelers were a great source of informtion for safaris.
All in all: Don't go there if looking for luxury accomodation. But if you don't need that: We had a good time there, especially with the other travelers on the rooftop terrace.
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