During my recent motorcycle circumnavigation of Morocco, I had the pleasure of staying at the Auberge Familiale chez Belkacem a Merzouga. All I can say is that it's an excellent place to stay - comfortable, clean and tidy, great food, great price and was treated very well. For the money you really couldn't ask for anymore. Clean bed, hot shower, great food, good advice on the area, including some good tips for me on where best to ride the sand dunes and advice on the route I planned to take the next day from Merzouga to Zagora via piste.
The place is genuinely family run, with the owner, his wife and children (and brother) all being very helpful and welcoming. For €30 B&B what more could you ask for. One of the other reviews on here is obviously wrong. Whoever wrote it has mixed this Auberge up with some other place. This is a clean and decent place run by genuine people. I was even allowed to park my motorbike in the reception area for security - how good is that! It was a short and pleasant walk down to the big Dunes of Erg Chebbi and there were lots of handy shops nearby and an Internet Cafe.
The Auberge is well located, just off the main road heading into Merzouga (but the rooms were very quiet). The owner and his brother can arrange camel trips, etc should you be interested.
Save yourself some money, stay here instead of heading the few hundred metres down the road where you'll pay twice the amount. Top place - 5 stars.