I stayed at three hostels in Madrid back in 2010 – RC , Mad Hostel, and Las Musas. Las Musas, right off the Tirza de Molina metro stop, was my favorite one. I forgot to take photos of the inside, but the place has a nice huge kitchen (with free breakfast) with WIFI as well as a lounge area with couches and WIFI available. I should note that the WIFI is not extremely reliable — it was constantly going in and out while I was there, but it worked well enough to send/receive email. Skype? Not so much.
Drew Meyers is the co-founder of <a href="http://www.horizonapp.co">Horizon</a> & Oh Hey World. He worked for Zillow from September of 2005 to January of 2010 on the marketing team managing Zillow’s API program and various online partnerships. Founder of <a href="http://www.geekestateblog.com">Geek Estate Blog</a>, a multi-author blog focused on real estate technology for real estate professionals, and <a href="http://mykro.org">myKRO.org</a>, a blog devoted to exploring the world of microfinance. As passionate as you get about travel.