I really enjoyed a lot staying at Casa Sacnicte! It's run by an extremely friendly and helpful couple. Breakfast (with fresh orange) juice was included and the room, although a bit dark, was exceptionally clean. Free internet access would have been included too but didn't work while I was there, so I used the internet cafe around the corner.
Another plus: it's only 5min away from the Zocalo (walking distance).

We were even invited to share in the owners' family Christmas dinner feast, complete with Turkey and all the trimmings, and their breakfasts were wonderful too.

In addition to all the good things people have said, I would add how attentive the owners are. During our stay, they were also juggling visits from family and friends. Still, they made sure we were comfortable at every moment. We had an incredibly early flight, and, despite our insistence that we could plug in a coffee pot, they were up at 4:30 a.m. to see us off. The breakfasts were generous and hearing the owners' sojourns in the U.S. reminded us how interconnected we are in this global village.

Like most downtown hotels in Merida, some rooms receive street noise. This is no problem if it's air conditioning season, as the machines muffle the sounds. The downstairs rooms are more isolated from the noise. The upstairs rooms (again, when the AC is turned off) receive some noise but are more spacious and offer rooftop balconies.

This is a lovely B&B, not far from downtown (about seven blocks south of the grand plaza). Guadelupe was a wonderful host, very warm and welcoming. The rooms are clean, there's hot water (not a given in some other places I stayed), and there's a computer with free Internet access.